Lutz: GM-Chrysler Merger Makes Sense

by Aaron Cole

Updated: December 31st, 2020

My goodness, when isn’t former General Motors exec Bob Lutz just the best? The former GM chief recently appeared on an Automotive News panel and boy that guy has vision and the rest of us have bifocals.

Car and Driver correctly points out that Lutz makes good points regarding a merger between GM and Chrysler, but the sage’s wisdom doesn’t stop at the following quote:

“The knowledge that one is to be hanged in the morning focuses the mind wonderfully.”

Lutz, alongside TrueCar President John Krafcik, former BorgWarner CEO Tim Manganello, Aston Martin CEO Andy Palmer, among others, waxed philosophical on the car business and its apparently shrinking economy of scale.

Lutz said GM tried to buy Chrysler twice and that it would have made sense for the automakers: their headquarters are close, and there were efficiencies in their powertrains, i.e. Hummer and Jeep.

“I was always in favor of GM acquiring Chrysler and I honestly think it would deserve a serious look now. You would get synergies … which would be massive,” he told the panel.

And “Maximum Bob” being “Maximum Bob”:

“We look at DaimlerChrysler as having been a failed merger. Well, it wasn’t failed for the Chrysler shareholders. At the time of the merger, the Chrysler shareholders realized an enormous gain.

“The subsequent execution was flawed in that Daimler never stepped in. Everybody kept doing their own architecture, and you had the hubris as part of the Mercedes [side] that said, ‘We will never use a Chrysler engine.’ I have news for you: Our four-cam V-6 engine 3.2-liter was every bit as good as the equivalent Mercedes-Benz.”

And then cynical, coal-powered Bob:

“I don’t know if anybody noticed, but full-size sport-utilities used to be — just a few years ago used to be $42,000, all in, fully equipped. You can’t touch a Chevy Tahoe for under about $65 (thousand) now. Yukons are in the $70 (thousands). The Escalade comfortably hits $100 (thousand). (Eds Note: It gets comfortably close.) Three or four years ago they were about $60,000. What this is, is companies trying to recover what they’re losing at the other end with what I call compliance vehicles, which are Chevy Volts, Bolts, plug-in Cadillacs and fuel cell vehicles.”

Don’t you dare change, Bob.

#AutomotiveNews #BobLutz #Chrysler #GeneralMotors #SergioMarchionne

Aaron Cole

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4 of 93 comments

TW5 on Aug 06, 2015

FCA - BMW makes sense on the product side. FCA have no high-volume luxury brand. BMW has no truck or offroad presence. BWM SUVs could move into Range Rover territory with Jeep equipment and engineers, if BMW were so inclined. Fiat and Mini would step all over each other, but they could utilize powertrain economies of scale. FCA gets the hybrid technology it needs desperately, and they get access to carbon fiber, which might allow them to leap-frog the aluminum adopters?

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- DweezilSFV on Aug 06, 2015
  
  Yes. Because BMW/Rover worked out so well. Why not hook up with FCA?
  
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Sgt Beavis on Aug 06, 2015

“I was always in favor of GM acquiring Chrysler and I honestly think it would deserve a serious look now. You would get synergies … which would be massive,” he told the panel. Replace that word 'synergies' with 'layoffs' because that's what you're going to get and they WILL indeed be 'massive'

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- Corey Lewis on Aug 10, 2015
  
  A very good point. It would be a huge corporation. And as others have indicated, much of the Chrylser bit aside from Jeep and vans is useless to GM, and would be dumped. Many people would lose their jobs. I could see them using the 300 platform for a large Cadillac, perhaps.
  
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