By on February 5, 2007

wedding-caqr.jpgValentine’s Day. The day that keeps jewelers, greeting card companies, florists and candy makers afloat from the one Christmas to the next. The day where millions of dollars are spent around the world in the hopes of an increased chance of getting laid. And this year, it’s the day when DaimlerChrysler will reveal their makeover plan aimed at diverting Chrysler Group from its seemingly self-destructive course. Will “Project X” prove to be a lovefest for all concerned, or is it another St. Valentine’s Day Massacre just waiting to happen?

European stockholders and more than a few Mercedes executives have made no bones about their desire to trim the deadwood. They think DCX should ditch the “C” and become Daimler-Benz once again. If they had their way, the Chrysler Group would be cut loose and left to drift aimlessly until it either managed to paddle its own boat or went under. Either way, they would no longer have to worry about any corporate cross-breeding that could contaminate their unsullied gene pool.

According to a report in The Detroit News, the “dump Chrysler” partisans are about to be disabused of that notion. On February fourteenth, CEO Dieter Zetsche, Chrysler Chief Executive Tom LaSorda and Mercedes-Benz Chief Operating Officer Rainer Schmückle will officially unveil their revitalization plan for the stricken American automaker

The new plan contains some ideas analysts have long expected: radical downsizing of Chrysler’s production capability, consolidating its far-flung operations and slashing over 10K blue collar jobs. But the new deal also contains a real shock, a decision that’s bound to raise more than a few eyebrows amongst Mercedes’ German stockholders. First, the details…

Under the new regime, Chrysler will do the GM thing– UAW buyouts and plant closures– to become a leaner, meaner automaker. As part of this revitalization program, Chrysler will also strengthen its ties with its Teutonic teammate. The two companies will share parts (though restricted to underbody components to avoid “cheapening” the Mercedes brand.)

The two automakers will also jointly create a shared architecture for the next-generation M-Class, Grand Cherokee and Durango. And they’ll co-develop new vehicle designs, including the next crop of small cars for American and European consumers.

In addition to the formal restructuring plan, there are other indications that the Berlin wall dividing these two “equals” is crumbling. According to today’s Automotive News, Chrysler is considering offering a diesel version of their newly redesigned minivan by model year 2010.

The diesel minivan would be the second Chrysler product equipped with a Mercedes oil burner, a 2.2-liter turbocharged four. (The Grand Cherokee will offer a 3.0-liter V6 diesel starting next month; the diesel Ram 1500 projected for model year 2010 will have a Cummins turbodiesel engine).  

Chrysler is also consolidating minivan production to their plants in North America. They’ll end production at the Magna Steyr plant in Austria and move the European-market diesel and right-hand-drive Grand Voyagers back to a factory on Chrysler’s home turf. Once they replace the Italian-sourced diesel they currently use with EPA-certified Mercedes iron, there’s no reason not to offer them for sale in the US as well. And if that happens, could diesel passenger cars be far behind?

Chrysler’s restructuring plan sounds sound, but it flies in the face of the company’s well-established internecine conflict. As we’ve reported previously, the battle lines between the two behemoths have already been drawn. Lest we forget, DaimlerChrysler corporate development boss Ruediger Grube made a pre-Christmas declaration that "a Mercedes will remain a Mercedes and may not share a platform with anyone."

The tension between Germany’s “Mercedes first, last and always” loyalists and Chrysler’s American “You gotta help us out here” realists puts DCX on a tightrope. On a practical level, the Mercedes’ stockholders who share Ruediger’s reticence are not likely to back down simply because Mercedes has finally decided to do what they should have done in the first place. The backlash could be anything from demanding Zetsche’s head to wholesale stock dumping.  

Just as dangerously, an anti-Chrysler cabal within the Mercedes organization could simply drag its feet on the implementation side of the deal. Just by not helping to make the agreement work, Mercedes’ management could make it fail. They’d simply wait for the plan to fall apart in the existing melee of clashing corporate cultures.

Zetsche, LaSorda and Schmückle have all spent a lot of hours and burned a lot of jet fuel to try and salvage the rocky relationship between the Chrysler Group and its German masters partners. But as any marriage counselor will tell you, both partners have to work to make a relationship a success.

Until and unless Mercedes’ best and brightest get with the program, the recriminations will fly. Hopefully this Valentine’s Day will mark the start of something beautiful, rather than the beginning of the end.

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60 Comments on “Chrysler Suicide Watch 7: Be My Valentine… Or Else...”


  • avatar
    Paul Niedermeyer

    If this plan flies, Mercedes can start using this version of their famous advertising by-line:

    “Engineered like no other car in the world, except your mother’s Durango”

  • avatar
    mykeliam

    Why doesn’t Chrysler get to use the Merc technology from like 2 years ago. You know the stuff that Mercedes has already made better or simply just let go???

  • avatar
    Scottie

    I’d really hate for them to loose the MB image with Chrysler’s, but yet Chrysler has so much to gain. And being a pro-Jeep person, i would say, i’d hate for a durango a mercedes and a JEEP to share the same platform. The platform might be great, but something just seems amiss, unless its a unimog.

  • avatar
    bfg9k

    # mykeliam:
    February 5th, 2007 at 4:54 pm

    Why doesn’t Chrysler get to use the Merc technology from like 2 years ago. You know the stuff that Mercedes has already made better or simply just let go???

    Didn’t they already do that with the Crossfire?

  • avatar

    Didn’t they already do that with the Crossfire?

    They did it with the Crossfire and to a lesser extent with the 300/Magnum/Charger.

  • avatar
    tms1999

    In the US market at least, I’m not sure who would cross shop Chrysler/Jeep/Dodge with any Mercedes offering.

    Sharing underpinnings would have no consequence for Merc brand (because the Mercedes crowd certainly are not going to go for a Town&Country instead of a R500) But would do alot to the Chrysler/Jeep/Dodge engineering rep.

    Also the 300c crowd probably is not the E550 crowd. $30,000

  • avatar
    crazybob

    tms1999
    I don’t think it’s cross-shopping they’re worried about. It’s a perceived cheapening of the Mercedes brand by sharing parts and technology with a lesser manufacturer, and some of their customers won’t stand for that.

    However, I don’t see any reason they couldn’t share some of their older technology. I suspect even five-year-old tech would be an improvement for some of Chrysler’s products.

  • avatar
    windswords

    …salvage the rocky relationship between the Chrysler Group and its German masters partners.

    You had it right the first time. I wonder if Mercedes will stop charging Chrysler “consulting” fees to Mercedes engineers, even when Chrysler was assigned to help those same engineers on Mercedes cost reductions and quality improvements or if Chrysler will stop paying royalties on items they are forced to use, like the Mercedes automatic, which apparently is not quite as good as the ZF automatics which some say they were copied from, and which seems to have cost as much as the ZF.

  • avatar
    ZoomZoom

    Wow, I’m trying to remember these old facts…here goes:

    Investor’s Business Daily newspaper did a very comprehensive article about 3 or 4 years ago. They found that 6 to 7 of 10 corporate mergers fail the 1-year test, and almost all fail the 5 year test.

    Success is defined as this: The combined company is worth more than the “combinees.”

    Failure is when the combined company is worth less than the separate pre-merger entities.

    With such a high failure rate of merger/acquisitions, I would suggest that any CEO or board touting such an acquisition should be immediately released from their position of authority, before they have the chance to damage (or kill) their company.

  • avatar
    tom

    The problem is, that Mercedes can’t give Chrysler what Chrysler needs.

    Mercedes knows how to make the best luxury cars in the world, but they just have no experience with building small, cheap cars, nor do they even have the means to do so.

    The A-Class may sound like a contradiction here, but actually it’s a very good example. After the merger, when the Chrysler guys first visited Stuttgart, they shook their heads at what effort (=cost) went into the development of that car. Pretty much every technology in use in the A-Class had been exclusively developed for that car (e.g. a whole range of engines). Today there’s also the B-Class that uses some of the same parts but it’s still a very expensive undertaking. But Mercedes can charge the premium for their cars that Chrysler just can’t.

  • avatar
    Terry Parkhurst

    On the face of things, allowing Chrysler dealers to sell the Smart car sounds like a good idea; however, most American car dealers absolutely hate – but of course won’t admit – small cars. They have to sell many more of them, in a month’s time, to make the profits they did on those big herkin’ SUVs, in their prime (late 1990s). The idea of a diesel, most especially a turbo-diesel that could run a variety of fuels, in a Chrysler minivan appeals to me, as it might to a lot of people reading TTAC (well, the family guys and gals, or those carrying a lot of gear to events such as auctions, in any event). But to most Americans, the bad memories of all those GM diesels who blew out their bottom-ends, when installed in Buicks and GM trucks, makes the idea of a Chrysler diesel van more than a bit problematic, in terms of sales. The NADA Classic, Collectible and Special Interest Appraisal Guide & Directory, recommends a 10 percent deduction, when buying or selling one of the few 1980s Buicks that are still running with said diesels.

  • avatar
    Dream 50

    Forgive me for following the above digression, but the coming diesel craze isn’t going to save anybody. The early suppliers to the game are going to see some healthy profits initially, but the rising demand for diesel fuel will bring about increased costs for diesel fuel and, poof, demand for diesel powered autos will settle back down. Torque-lovers will be much happier than they are now, but I bet you 10 bucks and my left nut that barring any sort of CO2 tax scheme the vast number of commuter consumers will still be buying gas burners.

    On the other hand, there will be very few buyers who, when shopping for a new car, will even dream that something like a clean and quiet TDI will ever resemble their father’s glow-plug fortified Oldsmobile of 30 years ago.

  • avatar
    SherbornSean

    Torn,
    You make a good point “The problem is, that Mercedes can’t give Chrysler what Chrysler needs.” And Chrysler hasn’t given Mercedes the margins it needs.

    This merger has failed to date because Benz had no plan for improving profitability. It had no use for anything from Chrysler, even though the Americans had a knack for innovative product. And they haven’t figured out how to improve Chrysler with German capabilities.

    DCX instituted M-B’s product development gating process at Chrysler, which has resulted in vehicles which are uniformly safe and solid. But the new cars aren’t exciting (300 excepted), and given their interiors, are increasingly bound for fleet, not retail markets.

    The issue is that M-B’s brand DNA is its tradition of over-engineering. You know, “engineered like no other car in the world.” When they try to say that about the next ML, someone in an X5 is bound to say “Yeah, engineered like no other car in the world — except a Durango, heh, heh.”

    Mercedes needs to mean more than just heavy steering and premium interiors. If it shares significant parts of its engineering expertise, it risks losing the Benz brand. Then what?

  • avatar

    re American potential acceptance of deisel tech: probably close to half of today’s buyers won’t even remember those old GM deisel-fueled fisher wrecks from the ’80s. (I do because I was born at the very beginning of the Eisenhower administration). Furthermore, we here in America are notorious for giving second chances. If that weren’t the case, Audis would never have survived the sticky accelerator debacle, and the big 2.5 probably would have lost more market share than they already have.

  • avatar

    Dream50, I’ll take that $10, but you can keep the testicle.

    North America is one of the last bastions of the gasoline burning engine. Diesel is the true “Flexible Fuel” option as it can be run on any combustible oil… not JUST petroleum. While I agree that it will take longer to get Americans into Diesel-powered cars, I suspect the market measure will not be a “double hockey stick” like you describe, but instead we’ll see a slow, steady adoption of the compression-ingintion option. The date of the “vast number” of cars being Diesel is many years away, but like Europe, the day is coming.

    –chuck

  • avatar
    doktorno

    There is not much MB DNA left. IMHO, Mercedes Benz stopped building Mercedes Benzes in 1995, long before the merger.

  • avatar
    blue adidas

    This merger made no sense at all to me. I failed to ever understand any synergy between this collaboration. Chrysler didn’t need MB because they were doing very well at the time on their own. MB didn’t need Chrysler. This link-up was sloppy and the result is what we see today. Mercedes don’t impress anyone any more. Their quality stinks and the Asians and some US domestics are waxing it in sales. And Chrysler designs are so watered-down that the only forward-thinking designs of note are bastardized FWD Jeeps. I can’t even credit the 300 to MB because that car was already in development prior to the merger. Essentially, the merger of these two “equals” has made both less than they were before.

  • avatar
    Robert Schwartz

    Mercedes knows how to make the best luxury cars in the world, but they just have no experience with building small, cheap cars, nor do they even have the means to do so.

    In most of the world, Mercedes is known for taxicabs and trucks. They have paralyzed the ability of most Americans to think with their bs advertising campaigns. They are selling E class bits as 300Cs. They can repeat the process with the C class and the S class. Imagine the return of the Imperial.

  • avatar
    IAMVince

    By the way, Mercedes “quality” is a paradox.

  • avatar
    HEATHROI

    I can’t see the US taking to diesels in that same way that the EU does and that is because petrol is way cheaper in the US. Diesels sold firstly in the EU because it wasn’t as heavily taxed, but start offering a diesel CamCord and the numbers will rise.

    Back on the topic, why did DB take ove…whoops sorry ‘merge” with Chrysler then? It wasn’t for the dealer network or the small car lineup (or the trannys) Access to the US market is free and easy and MB has some great V8s of its own. If they wanted a small car division, why not FIAT, who was going cheap at that point, I’m lead to believe.
    The only thing I can think of is DB exec got a rush of blood to head after seeing margins on SUV sales to yahoos (mostly pretend yahoos) who imagine themselves shooting varmints & critters from their drivers window on the way to Crate & Barrel.

  • avatar
    BerettaGTZ

    Oh great, Mercedes “unlike any other” Benz selling a tarted-up Durango/Aspen as the next M-Class. What’s next, a rebadged Sebring called the C-Class??

  • avatar
    HEATHROI

    What’s next, a rebadged Sebring called the C-Class??

    It could be called a Cbring…just knock a couple of points off the Chrysler star… instant Benz

  • avatar
    doktorno

    “What’s next, a rebadged Sebring called the C-Class??”

    Almost as silly as selling a tarted-up Camry as a luxury car.

  • avatar
    Terry Parkhurst

    “Dream50” I’ll not get into my personal anatomy, nor yours. Barring testicular cancer, I imagine we’re both in reasonably good operating condition. That said, I too have to disagree with you about diesel. Also, I have to point out that, if I follow your logic, you meant to say that you believe today’s buyers will, in point of fact, imagine a TDI Jetta to be very much like their father’s Oldsmobile. (Thanks for that addition, since I had forgotten, until you mentioned it, that Oldsmobile also made the error of slapping diesel heads on a bottom-end with a crankshaft designed only for gasoline-induced compression ratios.) And that’s where I beg to disagree.

    There’s a phenomenon happening, which various government agencies are pushing along, that might also help; and that is, of course, bio-diesel. Yes, it costs more per gallon. But the savings – reported – in terms of mileage, theoretically make up for it.

    Then too, it is starting to look as if the Federal government is going to slap down on the automobile industry in terms of emissions, due to growing concern over global warming. So the incentive will there, for the manufacturers, to build more turbo-diesel automobiles and SUVs, maybe even pickup trucks.

    The best way to increase mileage and limit emissions, would be vehicles with turbo-diesels combined with electric motors and either batteries for storage (when regenerating power through the brakes) or ultracapacitors.

    The trucking industry will most likely set the pace; and the technology will transfer over to automobiles. I think – don’t know but only think – that to paraphrase the late, great Frank Zappa, it can happen here.

  • avatar
    tom

    HEATHROI: Back on the topic, why did DB take ove…whoops sorry ‘merge” with Chrysler then? It wasn’t for the dealer network or the small car lineup (or the trannys) Access to the US market is free and easy and MB has some great V8s of its own.

    Actually it was to get a bigger piece of the American market which was at that point in its bloom. It was part of Mr. Schrempp’s stupid idea of a “World inc.” (Remember Mitsubishi?)
    The premise was that analysts were forcasting a future in which only 4-5 car companies could survive. Since Daimler-Benz didn’t have the backing of the state or a family they thought that they should grow, so that they become too big to get taken over.

    Chrysler was considered as perfect match BECAUSE it was so different since there was basically zero overlap.

    Terry Parkhurst: The best way to increase mileage and limit emissions, would be vehicles with turbo-diesels combined with electric motors and either batteries for storage (when regenerating power through the brakes) or ultracapacitors.

    The best way to limit emissions would be to go to 100% Bio Diesel (aka BTL-Fuels). In this case we’d have zero emissions.

  • avatar
    Glenn A.

    I just “have to” poke a stick in DCX’s eye and alert everyone to the fact that Mitsubishi just turned in their profits/loss statements, and they are profitable now.

    http://www.theautochannel.com/news/2007/02/06/036255.html

    Let’s not forget that about 2 years ago when Mitsubishi was part-owned by DCX, and needed a temporary boost, the DCX bosses threw their Japanese wife out of the house, said go to hell and don’t come back. So she went back to mom & dad (Mitsubishi Bank and Mitsubishi Heavy Industries) and is now doing well after the divorce, thanks very much.

    SMART move, DCX! (pun intended).

  • avatar
    Glenn A.

    Just had a brain-storm. Maybe Exxon-Mobil could deflect the bad feeling of a lot of people who’ve had to pay tons of extra money for fuel over the past couple of years, and use a small portion of their 39.4 BILLION DOLLARS to purchase the entire General Motors Corporation, Ford Motor Company and Daimler-Chrysler AG and then merge them.

    Then, no matter HOW much money they make, GMFDC would surely sap off enough in losses to keep their tax bill low.

    Think of the synergy of such an operation (tongue in cheek).

    Keep building those “great” Stupendously Useless Vehicles and keep reducing the prices!!! Keep that oil flowing from the middle east!!! Don’t worry, be happy, they’re only joking about jihad, right?

  • avatar
    Dream 50

    Terry:

    No, you aren’t following my logic. Maybe I wasn’t clear, but I thought the “(o)n the other hand…” at the beginning of the second paragraph was a clue that I was trying to see both sides. I was saying that the differences between a new TDI and the piece of shit that my old man borrowed from a friend for a couple of weeks are so vast that very few people would ever connect the two. All the salesman has to do is send the potential customer out on a test drive and the technology is sold.

    The reasoning behind my wager, though, and I’m talking to you, too, Chuck, is that the increased price of the diesel auto along with a likely increase in diesel prices will not lead to a huge increase in sales of compression combustion cars. They are popular in Europe because the government there taxes CO2. As I said above, torque-heads will willingly pay a premium for their choice of rides in a clean diesel (and make mine a 2wd 5M Tacoma), most folks will not pony up the premium if the price at the pump climbs much more relative to gasoline.

    So do I have any takers for the cash or my testicle if I say diesel won’t make inroads much past 10 percent of the market, barring Euro-like government meddling?

    And North America is not the last bastion of the diesel-free car. If I am not mistaken, no Japanese auto maker currently offers a diesel in its home market. Last year Tokyo city would not register oil-burners. And as the nation’s largest market goes, so does the rest of the nation by default.

    Lastly, torn, BTL or Bio diesel or whatever does not give us zero emissions. That stuff has to be processed and that will create emissions. The questions that need to be answered are where does the energy come from to get our energy, and how clean is that? Don’t get me wrong, I’m all for alternate fuels, but let’s not blow sunshine up our own asses.

    Keith

  • avatar
    SuperAROD

    I think it is hilarious how short the German’s memories are. From 2002-2005, it was Chrysler that was swimming in profits and Mercedes swimming in red ink. Mercedes finally turns it around and Chrysler has a bad 2006 and now the Germans act like their stuff doesn’t stink.

    Fortunately for DCX, Dr. Z knows that Chrysler has a ton of potential, and knows that Chrysler kept the boat afloat for 4 years so it sounds like he is going to do everything he can to keep the ship together.

  • avatar
    jurisb

    chrysler 300, crossfire, dodge magnum,- sitting on merc old platform. jeep compass, jeep patriot, dodge caliber, dodge avenger, stratus, chrysler sebring- sitting and leaning back on mitsubishi LANCER platform. now drain away your last morsels of homegrown engineering and become the superrebadge power of the world! the empire of ziplock bags! the fort of tupperware container! the miracle of gillette shaving foam! the einsteins of pamper`s diapers! WHy manufacture? just milk merc and mitsu!
    Then add diesel to viper and smooth it out like some daddies merc. rebadge everything. you guys come up with nice slogans, nice plans, but all you need is elbow grease. there will soon be no left a single american platform. what does it say about chrysler`s potential? what message does it send to a customer? you see, americans still preferred their home brands even if they were a little venerable( this is what you call obsolete without hurting anyone). why would americans buy german cars that have only american names? by the way before you designed the new van( 3rd generation since 1984(84-94,94-2006) did you look at nissan quest, or honda odyssey? did those cars have generation appeal? no? just good vans. so why your new ones look like flattening just to old retirees? promises ,promises promises. and at the end call it only one way downsizing. downsizing of anorexia scale.

  • avatar
    quasimondo

    “What’s next, a rebadged Sebring called the C-Class??”

    Acura, Lexus, and Infiniti get away with selling rebadged Hondas, Toyotas, and Nissans (even though those names are not sold in other countries), and I don’t hear complaints of a car like the Camry being a poor man’s ES350, or the TSX being called a dressed up Accord.

    I think it is pure folly to believe that sharing a few old MB parts on a new Chrysler is going to dilute the MB brand. It’s not as if Chrysler is making demands the other way around and trying to get MB to use Chrysler parts in a S-Class. Even with the disappointment of the Crossfire (personally, I thought it was too tame to be considered a sports car), the success of the Magnum/300C shows that it could work, and yet I don’t recall anybody deriding these cars as a poor man’s E-Class. History will look back at the reason this merger failed is because MB’s snobbery prevented them from getting the most out of Chrysler that they could.

  • avatar
    Glenn A.

    The other real-world down-side to diesel is the cost of the fuel in the United States. It is currently about 50 cents more per gallon compared to gasoline, or about $2.67 vs. $2.17.

    That’s currently a 23% premium for diesel fuel.

    Now, take into account that a diesel is “approximately” 30% more efficient than a gasoline car, and you have a bit of savings.

    Let’s be even more fair and make it a 40% better efficiency for diesels, since we are now being forced to use 10% ethanol in gasoline cars, which most cars simply pass through (losing 7% to 20% MPG in real-world conditions – I’ve tried literally dozens of cars since 1980 on “gasohol” / E10 and so I know).

    Still, there is the big price increase of a diesel car compared to a gasoline car. The anti-hybriders are all over the price premium for hybrids yet “nobody” talks about this with diesels.

    The one short-term advantage diesel will have for some people is the fact that Bio-diesel can be made from some crops. But this is very short-term. Here’s why.

    If we’re already taking food out of the mouths of the hungry in the rest of the world by making corn into ethanol for gasoline cars (30 gallons of E85 takes the equivalent amount of a year’s worth of food from the mouth of someone in a 3rd world country, according to some interesting studies) then exactly where are we going to grow even more crops to drive on? And how many more people will go hungry so we can have our diesel cars? When will their governments stand up and say – we’ll fight you for those crops so we don’t starve?

  • avatar
    airglow

    Tom:

    The best way to limit emissions would be to go to 100% Bio Diesel (aka BTL-Fuels). In this case we’d have zero emissions.

    Tom,

    There isn’t enough crop land in the world for biodiesel to ever be more than a niche product with a single digit market share.

    Sugar beet butanol and especially cellulosic ethanol have more potential due to better yield per acre.

  • avatar
    NickR

    By the way, Mercedes “quality” is a paradox.

    Totally. I don’t know where the hell the idea came from that Mercedes’ quality and superior engineering were going to be a boon to Chrysler. Mercedes doesn’t have any! They may have some great concepts, but their execution is terrible. Look at Consumer Reports. I know it’s not the bible of what to buy or not buy for enthusiasts, but I do think they record reliability accurately, and virtually every Mercedes model is in the ‘Not Recommended’ group.

    I took Mercedes to court over my C – Class, and did a ton of research in preparation. I found that their quality is abysmal and has been for years. And this wasn’t just anecdotal evidence from gripe sites either. (As an aside, the last Mopar I heard of that had as many systemic problems as my C – Class was the Volare/Aspen duo.)

    Chrysler had nothing to gain from a takeover by Mercedes. Nothing. I’d be delighted to see them go under (ok, so I am bitter).

    The Smart Car isn’t going to save their bacon. It has lost money every single year. It has been available in Canada for some years now, and is just a niche product driven by a precious few individuals for errands. Seldom do they venture out on the highway. For many drivers it is simply too intimidating to be in something that small, surrounded by 18 wheelers, and the acceleration on on-ramps is so slow as to be dangerous.

  • avatar
    airglow

    Glenn A.:
    February 6th, 2007 at 9:43 am
    I just “have to” poke a stick in DCX’s eye and alert everyone to the fact that Mitsubishi just turned in their profits/loss statements, and they are profitable now.

    http://www.theautochannel.com/news/2007/02/06/036255.html

    Let’s not forget that about 2 years ago when Mitsubishi was part-owned by DCX, and needed a temporary boost, the DCX bosses threw their Japanese wife out of the house, said go to hell and don’t come back. So she went back to mom & dad (Mitsubishi Bank and Mitsubishi Heavy Industries) and is now doing well after the divorce, thanks very much.

    SMART move, DCX! (pun intended).

    I don’t even know where to start.

    Mitsubishi Motors turns a small profit and they are back???

    Mitsubishi Motors has NEVER made a profit in North America!

    The Kiritsu partners dumped BILLIONS into Mitsu-Motors to get them to there current small profit. They have a long way to go to even break even on the insane amounts of cash they’ve thrown down the Mitsu-Motors rat hole.

    Mitsubishi Motors is the all the proof needed that Japanese companies over a certain size will always be saved, even if it obvious to any sane, rational person the company should just die.

  • avatar
    Steve_S

    I don’t see how you could cost effectively have an MB platform used under Chrysler. Even if you positioned Chrysler as an entry level lux brand like Acura the components would keep them from being cost effective. Now if MB could use a cheaper platform then they would reap even more money because then they could sell it for more.

    Give Mitsubishi another couple of years and they will be just fine. The new Lancer and Lancer Evo look really good and the Outlander has had good reviews. The Galant needs a major make over and the Eclipse needs a mid-cycle refresh to clean up the styling.

  • avatar
    windswords

    jurisb, please do a minimum of research before commenting here. The readers and posters here are very knowledgable about autos. This is not Autoblog, where the inmates run the asylum and you can post anything you want whether factual or not.

    The Chrysler 300 and it’s stable mates are not based off of old Mercedes platform. the original Ralph Giles body had already been penned by him and introduced as a concept (it was called the Chrysler Nassau – just like the recent new concept at the NAIAS). The rear suspension’s design is based off of the E-Class but that’s about it – no parts are shared or are shareable.

    The Dodge Caliber, et. al. are based off the Lancer platform. There is a lot of re-engineering going on to make the vehicles unique to there respective markets. Platform sharing is done to save money (we’re talking billions here), and whoever had the newest platform is usually picked. The latest MB M class has a lot of Grand Cherokee in it.

    The Chrysler minivan generations are as follows:
    1st gen – 1984-1995 T-115 or S platform (refresh in 1991, AS platform)
    2nd gen – 1996-2000 NS platform
    3rd gen – 2001-2007 RS platform
    4th gen – 2008 (2007 as a 2008 model) RT platform

    Wikipedia lists the RT as the 5th generation, counting the 1991-94 AS as a separate generation.

    Apparently you think that when automakers collaborate on engineering or design they are “milking” each other. None of this is info hard to find on the internet. If you really want to know what’s in Chrysler products you can go to Allpar.com. Or you could always post on Autoblog.

  • avatar
    tom

    Dream 50: Lastly, torn, BTL or Bio diesel or whatever does not give us zero emissions. That stuff has to be processed and that will create emissions. The questions that need to be answered are where does the energy come from to get our energy, and how clean is that? Don’t get me wrong, I’m all for alternate fuels, but let’s not blow sunshine up our own asses.

    Well, that is true. But there are still a lot of savings. Firstly, regular gas has to be processed as well, atop of the emissions it produces anyway. I don’t actually know how much energy is needed to process BTL, but It can’t be close to the emissions of today. Also, it’s possible to come up with alternative sources for power generation. We already have nuclear energy and are working on zero emission coal/natural gas-fired power plants. But even the ones today are way more efficient than an internal combustion engine. And finally there is an increasing number of regenerative energy sources like biogas, solar energy, wind- and water power…

    airglow: There isn’t enough crop land in the world for biodiesel to ever be more than a niche product with a single digit market share.

    That’s true for the first gen bio diesels. But the second gen (BTL) doesn’t have that problem as you can use any sort of bio mass, not just the oil. So you wouldn’t need one single additional acre, you can just use the bio waste thats accuring anyway.

    Now I’m (slowly) trying to somehow get back on topic. The whole point of this is that electric cars don’t work, simply because the energy storage is flawed. A battery just takes too long to charge and at least asof today doesn’t last very long. So it’s just not practical (and power generation takes more energy than processing bio mass). That’s why I think that the future lies in BTL fuels. And that’s where the chance for Chrysler lies (finally back on topic).

    Chrysler can profit from Mercedes’ diesel technology. If Chrysler brings diesel options on the market for every car and truck in their line up within the next couple of years, they’ll be ready when BTL fuels start becoming cheaper than regular gas. Sure, this is a long term strategy as it will still take at least a decade but it is a big chance for Chrysler.

  • avatar
    tom

    windswords:

    The 300 doesn’t only have the E-Class’ suspension. It basically shares the entire drivetrain. Not exactly the same platform, but not far off either.

  • avatar
    jdv

    Isn’t Mercedes brand value supposed to be based on technology, comfort, and manufacturing quality?

    If Chrysler doesn’t bring down their quality I don’t see how Mercedes is devalued. You know they’ll continue to have above average comfort features, and no way can all that technology make it into Chrysler’s.

    So it seems to me that platform sharing is a win all around, especially if they can up their build quality on all shared components

  • avatar
    Spartacus

    The 300 doesn’t only have the E-Class’ suspension. It basically shares the entire drivetrain. Not exactly the same platform, but not far off either.

    Oh yeah, it uses the old Merc 5.7 liter Hemi engine straight out of the E-Class.

  • avatar
    Glenn A.

    The Chrysler 300 / Dodge Magnum cars are in fact, as noted above, NOT directly based on Mercedes parts. But then, neither is the SsangYong Chairman (a luxo-barge built in South Korea by an ex-Mercedes affiliated company which mostly builds SUVs). The Chairman engine IS actually the Mercdes-Benz inline six from about a decade ago.

    If I recall correctly, Mercedes “assisted” in the design of the entire affair by sending some engineers to South Korea.

    See the car for yourself. It really doesn’t look too bad, and I’ve read some reports and road tests from other nations in which it’s sold, and it isn’t a bad car. Strangely enough, it seems to be more reliable than “real” Mercedes cars (and how embarrassing is THAT for DCX?). The “downside” for lead-foots is that the “biggest” engine is a 3.2 liter DOHC six with M- B designed 5-speed automatic. (7 and 8 speeders now being “the thing”).

    http://www.smotor.com/en/showroom/chairman/main.jsp

  • avatar
    windswords

    To quote and old post – The [300’s] rear suspension’s design is based off of the E-Class but no parts are shared or are shareable. The transmission is based off a Mercedes design but has a number of differences. These are the only commonalities.

    Allpar says “LX cars will use the Mercedes E class traction control, electronic stability systems, axles, wire harnesses, automatic transmissions (downgraded to five speeds from six so Chrysler won’t go into Mercedes turf – even as GM and Ford create a new six-speed automatic), steering columns, and other major suspension components. 20% of the Magnum’s components are shared with Mercedes, according to Wolfgang Bernhard (40% of the Crossfire is Mercedes).

    AutoWeek (Mark Vaughn) quoted chief engineer Burke Brown as saying that while Mercedes provided many components, “few parts are straight out the Benz bin.”

    Also from Allpar:”In 1997, the plan was to have an Intrepid and Concorde replacement, each front wheel drive, as well as a 300N (5 meters)[sucessor to the LH based 300M – windswords], full size rear wheel drive, and either a Charger or 300N convertible. The LH platform was designed for either front or rear wheel drive and could have gone RWD at any time. Third-generation LH models with front, rear, and all wheel drive, which could all have been built together, were built as prototypes, and it would have taken less than ten minutes to switch the line from rear to front drive. Chances are if the takeover had not taken place, the LX series would have appeared in 2002.”

  • avatar
    nino

    The other real-world down-side to diesel is the cost of the fuel in the United States. It is currently about 50 cents more per gallon compared to gasoline, or about $2.67 vs. $2.17.

    That’s currently a 23% premium for diesel fuel.

    That’s easy. Raise the gas tax so that both fuels will be the same in price.

    Still, there is the big price increase of a diesel car compared to a gasoline car. The anti-hybriders are all over the price premium for hybrids yet “nobody” talks about this with diesels.

    The price difference exists because there isn’t enough Diesel volume (for a car sold in the US) to make up the slightly larger engineering costs for a Diesel powertrain. In Europe, the difference between gas and Diesel powered cars is very slight and more than offset by the tax structure in those countries that hurt gas engines more.

    The one short-term advantage diesel will have for some people is the fact that Bio-diesel can be made from some crops. But this is very short-term. Here’s why.

    If we’re already taking food out of the mouths of the hungry in the rest of the world by making corn into ethanol for gasoline cars (30 gallons of E85 takes the equivalent amount of a year’s worth of food from the mouth of someone in a 3rd world country, according to some interesting studies) then exactly where are we going to grow even more crops to drive on? And how many more people will go hungry so we can have our diesel cars? When will their governments stand up and say – we’ll fight you for those crops so we don’t starve?

    This is just wrong.

    Bio-Diesel technology is concentrated in producing fuel from crop and animal wastes and garbage. There is also technology afoot to use waste oil from cars and trucks AND from RESTAURANTS to convert that into fuel.

    No bio-Diesel plan that I have seen recommends turning viable food crops into fuel.

  • avatar
    tom

    Oh yeah, it uses the old Merc 5.7 liter Hemi engine straight out of the E-Class.

    Not the engine, the drivetrain. You know, everything inbetween the engine and the rear axle…

  • avatar
    cheezeweggie

    I thought that one of the reasons for the merger was for M-Benz to have access to low cost Chrysler platforms to sell in Europe ? At the time, Chrysler couldn’t do no wrong.

  • avatar
    jurisb

    to windswords– i did research and have been doing it since age of 5. the second generation chrysler van 96- 2001 is actually the same as 2001-2006. why? because they share bodies. the front windshield, a-pillar, front doors, gas cap configuration is identical. so you can not call it a next generation car unless it has a new body. the same cheap actions were done by ford that practically improved 1994 windstar into the new2001 freestar leaving the same doors, a-pillar, windshield etc. ditto for gm vans- they used 1994 opel sintra, and today you still have the same body on your gm vans including buick terraza and chevy montana.by the way somebody mentioned that merc and chrysler share parts. what parts has merc received from chrysler? none. period. jeep grand cherokee sits atop merc m-klass, and the underpinnings were merc created, except hemi engine. the same is chrysler pacifica, that uses merc e-klasse previous gen platform.
    those who say japanese do rebadge- let`s not forget, japanese rebadge japanese cars- meaning their own cars, while americans rebadge foreign cars more and more. and toyota and lexus are no rebadges even if they share platforms or engines, they still don`t share bodies. that is not a single exterior part of lexus could fit on toyota and vice versa. the lexus land-cruiser is the last one in toyota family that shares body with lexus. the new land-cruiser( due this fall) will share no exterior pieces with lexus upcoming SUV.( ditto the new supra will share the new 5liter 525hp engine, but no exterior parts with lexus LF-A) rebadging means sharing exteriors, not interior parts, engines , gearboxes or platforms. rebadge is an imitation of merchandise diversity. [email protected] latvia

  • avatar
    windswords

    jurisb, maybe you should tell Wikipedia they are wrong. The fact that the dimensions are the same means nothing. If you got the dimensions right the first time (in 1984 let alone in 1996) why would you change them?

    what parts has merc received from chrysler? none. period. jeep grand cherokee sits atop merc m-klass, and the underpinnings were merc created, except hemi engine.

    From Allpar.com “The next-generation M class, as reported earlier, will be substantially different, and based heavily on the Jeep Grand Cherokee.”

    that is not a single exterior part of lexus could fit on toyota and vice versa.

    Hmm…not a single exterior or interior part of the NS (96-01) will exchange with the RS (01-07) minvans, unless you want to count door handles and license plate holders.

  • avatar
    Busbodger

    How many miles do YOU drive in a day? I find that I drive about a 100 miles a week. Our extended family drive maybe 60 miles a day.

    An EV1 that GM built in the mid-1990’s would last almost a week (80 miles or so) for me with old battery technology. Toyota RAV4-EVs built around the same time would go 120 miles a charge and several now have over 100,000 miles on the same batteries. An EV is not a vehicle to travel in but for errands and commuting around town. They are perfect since these areas are the most polluted areas anyhow. Those example vehicles were from the 1990s! Imagine what a vehicle designed today could do:

    http://en.wikipedia.org/wiki/Eliica

    http://en.wikipedia.org/wiki/Tesla_Roadster

    A bit expensive right now, but then most hand built cars are. Start cranking out about 50,000 a year and see if the technology doesn’t drop in price. What is an EV anyhow? It’s a hybrid without a gas engine and with extra batteries.

    GM held the rights to some impressive battery technology which they later sold to Chevron. They could have built some VERY good electrics with those batteries.

    I’ll bet that an EV would work WELL as a commuter vehicle for hundreds of thousands daily drivers. Save the minivan or SUV or pickup for the weekend. When you NEED more vehicle.

    The charge cycle isn’t a problem either. I get home in the evening, plug it in and by morning it’s ready. If I need to run to the grocery, it’s likely got plenty of charge for that too.

    Well actually… Add solar to the rooftops of America and we can start idling some of those power generators. Build some new nukes. Diverisfy how we make and consume our energy in this country. Electric semi-trucks (ie. European trains anyone)?

    16 panels ought to charge 1 vehicle or in my family’s case two EVs because we purposefully live in a small town with short distances between home and everything else.

    An average rooftop will contain those 16 solar cells nicely.

    $15K additional cost to the price of the home, 7 years to payoff, 23 years of making power for free…

    Sell the power back to the local power co-op and then buy it back at night to charge it with. I’ll bet in some areas you’d even make money selling at peak hours and buying at off-peak hours (California).

    Imagine what a big box retailer could generate with one of those big rooftops! Might try to lure you to their store with free charging stations… Imagine those glass office towers with windows that double as solar cells. They can do that today!

    As much as I like diesels (and hope to buy a turbo diesel sport wagon aka VW Passat in the near future) I think hybrids will dominate. They’ve got big torque just like diesels with electric assist. They are cleaner (no particulate emissions, no major NOx emissions) and so far the Asian batteries are aging VERY well – some with over 100,000 miles on them.

    I think the question will be can the hybrids reach 200K miles with any battery capacity left? I know a quality turbo diesel (aka VW) will last that long treated well.

    As for the Oldsmobile and Buick fiasco of the 1980s. Fear not, the young consumer doesn’t even know anything about those cars in most cases. Most of the young teens I know barely even know about records – – – and cassette tapes are fading fast… Olds diesels, air cooled automobile engines, mechanical brakes, crank up windows, suicide doors (just what that means), leaky British roadsters, and the Vega are quickly disappearing into history…

    I’m anxious for the baby boomers to retire b/c I hope this will lead to new ideas and new strategies at the big 2.5 in Detroit.

    Chris

  • avatar
    jurisb

    to windswords .well the dimensions don`t matter proportionally, but if the van carries the same sheetmetal as previous gen, you call the van an improved , not next gen, and I talked about swapping exterior not interior, because it`s common practice to share steering wheels, seats, switches etc. but when it comes to exterior, if a car has the same a-pillars, windshield, gas cap conf, doorframes- it is no next gen. and it doesn`t matter that you make more bulging bumpers or add chrome lining, it is still not a new model. and i don`t know about what kind of ns van of toyota you are talking about? because rs is a suv. and stating that merc m-class is heavily based on new grand cherokee is absurd. do you really expect germans to use chryslers 2valve per cilinder single cam engines on merc? you see ,, i don`t care what a wikipedia tells, i live in cars, i breathe them, i am a car, . it takes me a second to look at 1994 dodge venom concept to realize that it has mitsubishi3000gt mirrors, it takes me second to realize which car sits atop vectra platform and which one has shared parts from global daewoo bin. toyota doesn`t drive cheaply, they are not afraid of elbow grease. you know those nice movements with sandpaper. they create physically things themselves, not make an impression of making them. [email protected]

  • avatar
    windswords

    All I can say is they must ship you something different in Latvia then what we have here stateside. Good luck taking a hood or fender from a 96-2000 and putting it on a 2001. The NS and the RS and now the new RT about to come out are the Chrysler codes for the platforms that the minivans are built off of. Yes the M class has a different engine. I was talking about the platform peices, suspension etc. Not the motor, not the sheetmetal. 1994 Venom? I think you mean the Viper? The Venom was a conecpt car that was never produced. The Stealth was based off a Mitsu 3000GT (the Dodge version at least didn’t copy a Ferrari like the 3000).

  • avatar
    Busbodger

    When I lived in Italy there was often a year between what was sold in America and what was sold in Europe. For example my Italian-spec 1972 VW Super Beetle (curved windshield) was equivalent to a US-spec 1973 VW Super Beetle. The US-Spec 1972 VW Beetle still had the flat windshield

    I don’t know if DCX has done the same but it’s a possiblilty.

    Chris

  • avatar
    davert

    I couldn’t agree more. Before I read this (promise!) I wrote a similar opinion from a somehwat different angle.

    http://www.allpar.com/weblogs/2007/02/07/integration-restructuring-and-death-spirals/

  • avatar
    davert

    PS> Schmuckle is not a corporate savior; he’s a hatchet man. Look at what he did at Freightliner. I think some of your optimism about Project X, even if it is implemented, is misplaced. This is, as you say, all about German ethnocentrism. Chrysler will continue to be sucked dry and when it finally folds, Daimler-Benz will find another sucker to merge with.

  • avatar
    aendoh

    Yeah, it is interesting to see the “other” side of the DC merger…

    Greetings from Berlin

  • avatar
    Captain Neek

    mykeliam: @ February 5th, 2007 at 4:54 pm

    You hit the nail on the head. I have no idea why MBenz is suddenly coming over all coy with its hand-me-downs. Their coyness is exasperating, especially when their adulterous past is taken into consideration. Jeez Louise, if MB was anything less than a flagrant strumpet I could sorta see their point in “protecting the brand”, Deutschland/Stuttgart uber alles and all that…

    However, for all the virginal, unsullied MB owners (me included), there is a dark little secret (?) out there – a bastard MB offspring residing in the East. Even the fact that it trumpets the fact that MB is its daddy seems to fall on deaf ears.

    The name of the illegitimate one? Ssangyong. and I quote from their website:

    “SsangYong models are all built in Korea, using largely Mercedes-Benz licensed technology.”

    What does that mean, exactly? As far as I can determine, it includes MB engines (petrol and diesel), as well as full vehicles in some cases. I think the Ssangyong Chairman is a mildly rebodied S- or E-Class (http://www.ssangyong.co.nz/chairman.html). “The Chairman offers technologically advanced engineering and electronics using Mercedes-Benz licensed technology. There is a 3.2 litre DOHC engine with a Mercedes-Benz 5-speed automatic transmission.”

    Most Ssangyong’s have stickers on the back proudly proclaiming “Powered by Mercedes Benz”. Even some of the more successful attempts at design are “Benz-a-like”, as if crying out for their paternal lineage to be recognised.

    And the point is that it is Chrysler that should be in the position of Ssangyong. Why not give Chrysler the technological, chassis and powertrain hand-me-downs from MB? At least in its most hotly contested market segments – surely the MB honchos must see the sense?

    MB’s “American Patient” cannot simply be allowed (forced?) to wither and die. Will we all simply turn our backs on another transcontinental automotive blunder of biblical proportions? Umm-ing and ahh-ing and saying that it couldn’t be helped…? A massive destruction of shareholder value (i.e. Chrysler down the tubes) could be avoided if the mercedes mandarins could be persuaded to lift their skirts a little to indulge in some hanky-panky with their american cousin? I, for one, would promise to look the other way…

  • avatar
    NickR

    From yesterday’s news:

    DaimlerChrysler Chairman Dieter Zetsche said the company is looking into “further strategic options with partners” for Chrysler. “In this regard we do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler,” Zetsche said in a statement.

    Translation – ‘take my Chrysler…please’

  • avatar
    Brian

    If Chrysler would build a Town & Country Limited with AWD and a Mercedes 3.0L turbo diesel, I’d be the first one to buy one.

    DaimlerChrysler could double sales in the American market if they’d stop argueing and put together something that no one else is making, with components they’re already making.

    The most reliable components in a Mercedes are their diesel engines. For those putting down Chrysler, Mercedes may have very good initial quality but long term reliability, their no better than anyone else.

  • avatar

    A four cylinder Mercedes diesel is definite for 2010 or so.

  • avatar

    PS> Interesting views on the DCX problems. Seems like the supervisory board is in two camps, the Schrempp Chrysler-haters and the Zetsche sympathizers. Lots of discussion… http://www.allpar.com/weblogs/

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