At the Geneva Auto Show, no one from GM talked about their interest in Chrysler openly. But somehow, in GM’s quiet moment, some insiders were updated that GM might be interested in Chrysler if they were paid to take it. But then, they will compromise the positive aspect and might not be worth the interruption to the management team. There might be picture of GM and Chrysler joining forces and it might make some sense if Chrysler were to be bought by a private equity group. GM might consider a strategic alliance established on selected product development programs.
For example, like trucks. Dodge’s Ram pick-ups are fading fast and for the full-size SUV, Durango has never been a spirited entry. GM can provide the architecture applied to the new generation of Ram and Durango line-up which is the GMT900. In any circumstance, Chrysler gets the new Dodge trucks. At less cost than doing them all itself and GM gets a fair and better benefits from great economies of scale on a group of GMT900 components and technologies. GM’s product based strategic alliance would be headed on its way and not just any one-way street. GM would not imagine the risks upon investing on finances or structural problems of Chrysler. To think that product sharing can result to considerable cost saving. It goes something like the VW brake parts; it will never function unless it is complete.
As for Chrysler, a tactical bond with GM would help its finances to decrease their capital costs desired for their product’s development and technological progress. It’s a give and take relationship that both companies will get something good out if ever they get associated with one another. The companies will benefit upon agreeing to their negotiations, one good reason that makes a lot of sense.
By: Benjsmin Hudson