Note to Wall Street: Crankiness and a dour disposition may be assets in the car-writing biz. On you, however, it fits poorly. Please leave my schtick alone, and return at once to your former escalatory happiness. The Crank’s 401(k) thanks you.
Yes, General Motors stock is trading at levels not seen since the Age of Fins, and Ford can be bought outright for the change in the cushions of Warren Buffett’s sofa. (As of this writing, $1.99 can buy you either a House, M.D. ringtone or a share of Ford stock. And a ringtone is something you’ll always have.)
The interesting part is how these 20th-century automotive giants propose to respond. Reports say GM is considering whether to swap 49% of GMAC they still own to Cerberus Capital in exchange for Chrysler’s automotive operations. In essence, they’d be giving away the most profitable part of the company (but also a lot of messy mortgages) in exchange for market share.
Rick, Bob -- Do it.
Do it because neither of you has the market share needed to keep your overhead running. Do it because North American car manufacturing overcapacity is increasing, not declining. Do it because the jump you’re both trying to make to hydrogen and electric technology requires a stunning investment – and a company that will be around long enough to see it pay off.
But do it.
If it helps, tell Cerberus they can also have one of Lutz’s jets. He can’t fly them all at the same time anyway.
We don’t know what a merged GM and Chrysler would look like. We only know what it should look like.
On product, GM is superior almost throughout the line. Cobalt vs. Caliber is the dull leading the addled; Cobalt wins, but no matter -- the Astra trumps them both. Malibu vs. Sebring? Please.
The only Chrysler car platforms that deserve to stay are the 300M/Charger (as basis for the next G8 and Impala, mayhap) and the minivans. Should we mourn the Caliber? The Sebring? The Nitro? Naah – let us celebrate their retirement. A Viking pyre would not be inappropriate; with all that petro-plastic, a Caliber probably burns pretty well.
On the other hand, adding Jeep would let GM finally put a well-deserved double tap to Hummer. The Dakota could replace the fairly sorry Colorado/Sierra. Indeed, the only interesting question of the whole merger would be what to do with Dodge. Answer: If it isn’t hived off to China for cash, Dodge should replace the long-nebulous GMC as the “tough truck” brand.
Oh, and Challenger vs. Camaro? The Crank doesn’t think either of ‘em will be around long enough to worry about that.
Now, Ford. Not long ago, the Crank wrote these very words: “If Ford survives as an independent company, it will be thanks to Mazda.” So what is Ford doing, if the trades are to be believed? That’s right. Selling Mazda, or rather their 33% thereof.
The Crank understands needing cash (boy, howdy, he does.) And Mr. Mulally may be the smartest businessman in Detroit just now. So the Crank may be completely wrong on this. But the notion of selling off a big cash-flow generator and the engineering shop that sired a company’s best cars seems a tad short-sighted.
Perhaps things in Dearborn are just that bad – and maybe this is Ford’s way of bridging until the smaller European models can finally get over to the States and hasten the Blue Oval’s turnaround. If so, pace, Ford. One does what one must.
It’s a double-edged sword for Mazda, though. Management is reportedly trying to buy out Ford’s share, not as bold a gamble as it sounds. They’ve been independent before, albeit undercapitalized and long enough ago that a lot of their managers won’t remember the Toyo Kogyo company song. Mazda blossomed under Ford’s wing, learning important lessons about global sourcing and flexible production. Ford’s resources gave them the ability to show what they could do in engineering, too – and they surprised a lot of competitors foreign and domestic. That knowledge doesn’t vanish easily.
If, however, they fail to buy back the shares and become a junior partner to Toyota or Hyundai or Fortunate Frog Beijing Auto Works, the Crank does fear for Mazda. Ford needed Mazda in some very real ways. Most other auto companies do not – they already do well what Mazda does well. Who wins this competition will determine whether Mazda continues as a spunky builder of interesting cars or becomes a sporty nameplate attached to somebody else’s handiwork. The latter would be a shame – greater, even, than the passing of Walter Chrysler’s name from the automotive firmament.
