Carving Up Chrysler: Fun Speculation

I’ve written this post several days ahead of its appearance online, so the news of Chrysler’s sale could be final by this time. Still, it is kind of fun to see how everything might play out, especially given the different scenarios that have been discussed over the past few weeks.

It is a given that Chrysler as we know it will soon go away. Cerberus Capital Management, which took over Chrysler from Daimler in 2007, wants to sell off the company whether that means collectively or in pieces has yet to be determined.

Given that the entire Chrysler LLC set up of Chrysler, Dodge, Jeep, Mopar, and GEM probably doesn’t have much appeal to anyone, I see the company being thoroughly cannibalized and sold piecemeal. The following are some of my ideas on how everything might transpire:

The Minivans — General Motors has been emphasizing crossover models ever since getting out of the minivan business, but the Chrysler Town & Country and Dodge Grand Caravan are too valuable to pass up. Look for the T&C to become a Buick model while the Grand Caravan is sent to Chevrolet. Saturn and Pontiac might get their own versions at some point, but Buick could definitely benefit from having the T&C.

Jeep — Renault is back and they want to take back Jeep, which they sold to Chrysler in 1987 when Jeep was part of the American Motors Corporation. Certain Jeep models may not survive, but of all three of Chrysler’s major brands, Jeep will be the lone survivor.

Dodge Ram — Nissan will purchase the Dodge Ram which will be quickly become the 2010 Nissan Titan. Chrysler and Nissan had previously agreed that Chrysler would supply the platform for the next generation Titan and now the Japanese automaker can take over the entire model which is a much more popular seller than the Titan.

Dodge Viper — Fiat owns Alfa Romeo and has wanted to get a toehold in the US market with its Italian sportscar line. One way to do that is to acquire the Dodge Viper for Alfa Romeo while buying at least one Chrysler production facility to produce Fiat models. Perhaps the Dodge Caliber or Dodge Journey would transition to Fiat.

Ford Gets The Challenger — I’m going out on a limb here, but if Ford were to acquire the Dodge Challenger and offer the car through Mercury, it would immediately boost the Mercury name. Sure, the Challenger is competition for the Mustang, but Ford could control two-thirds of the pony car market with this purchase. Sounds nutty, but these are crazy days in which we live.

Orphaned Cars — Several Chrysler and Dodge models will probably be laid to rest once Chrysler LLC is divided up, though one or two Chinese automakers could jump in to snap up what they want or Peugeot, the French automaker might do the same. The following Dodge products are probably R.I.P. — Avenger, Nitro, Durango, Dakota, Charger, and Sprinter. The following Chrysler products are also likely D.O.A. — 300, Aspen, and Sebring.

On A Serious Note

Fun as it is speculating what could happen, many lives will be impacted by what takes place over the coming months as thousands of workers lose their jobs, plants shut, and confusion reigns on just how Chrysler, Dodge, and Jeep owners will fare. As far as GEM goes — the company’s electric vehicle arm — I can’t even guess. Right now, GEM produces a small fleet of limited use electric vehicles, which could appeal to any automaker or farm equipment company looking to expand into this niche.

MOPAR is the parts arm of the company and will need to be around to supply what car owners need for a very long time. Perhaps a large parts supply company, like a DENSO, might be interested in buying MOPAR ore even select manufacturing facilities.

Jeep Only Pitch By Renault?

It is no secret that Chrysler LLC is for sale and the owner Cerberus Capital Management wants to be freed of its short-lived involvement as a manager of an automotive manufacturer.

Rumors of a pending sale have been heating up with some analysts suggesting the General Motors will get the company while others have said that Tata Motors, Fiat, or even a Chinese manufacturer could make a pitch for the company. Most recently, rumors have flown around that Renault is interested in the company, but only for Jeep.

Renault previously owned Jeep when it was part of the American Motors Corporation during the 1980s, but sold out to Chrysler in 1987. With that move Renault exited the US market, unable to compete against entrenched American manufacturers and rapidly expanding Japanese car companies.

Obtaining a portion of Chrysler LLC might be more palatable to Renault who is joined at the hip with Nissan. A Nissan-Renault-Jeep company would carry a lot less baggage with it while allowing Renault to gain instant access to the US market with its own line of vehicles. The remainder of Chrysler could be auctioned off, perhaps to General Motors who has its eye on Chrysler’s minivans as well as truck manufacturing facilities in Mexico.

Whether that would spell the end of the Chrysler and Dodge nameplates is anyone’s guess, but it could allow GM and Renault to get the portion of the Chrysler pie each one wants.

Cash poor General Motors could buy Chrysler’s assets by selling off its remaining interest in GMAC to Cerberus who already owns 51% of the financing company. GM has little need for any of Chrysler LLC’s other products which overlap what GM sells, but union and government opposition could in the face of massive layoffs and plant closures could make GM’s quest all the more difficult to carry out.  Allowing Renault to take control of Jeep might lessen that blow, but significant cutbacks will still take place.