Lutz: GM-Chrysler Merger Makes Sense

Aaron Cole
by Aaron Cole

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.

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  • TW5 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?

    • DweezilSFV DweezilSFV on Aug 06, 2015

      Yes. Because BMW/Rover worked out so well. Why not hook up with FCA?

  • Sgt Beavis 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'

    • Corey Lewis 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.

  • ToolGuy CXXVIII comments?!?
  • ToolGuy I did truck things with my truck this past week, twenty-odd miles from home (farther than usual). Recall that the interior bed space of my (modified) truck is 98" x 74". On the ride home yesterday the bed carried a 20 foot extension ladder (10 feet long, flagged 14 inches past the rear bumper), two other ladders, a smallish air compressor, a largish shop vac, three large bins, some materials, some scrap, and a slew of tool cases/bags. It was pretty full, is what I'm saying.The range of the Cybertruck would have been just fine. Nothing I carried had any substantial weight to it, in truck terms. The frunk would have been extremely useful (lock the tool cases there, out of the way of the Bed Stuff, away from prying eyes and grasping fingers -- you say I can charge my cordless tools there? bonus). Stainless steel plus no paint is a plus.Apparently the Cybertruck bed will be 78" long (but over 96" with the tailgate folded down) and 60-65" wide. And then Tesla promises "100 cubic feet of exterior, lockable storage — including the under-bed, frunk and sail pillars." Underbed storage requires the bed to be clear of other stuff, but bottom line everything would have fit, especially when we consider the second row of seats (tools and some materials out of the weather).Some days I was hauling mostly air on one leg of the trip. There were several store runs involved, some for 8-foot stock. One day I bummed a ride in a Roush Mustang. Three separate times other drivers tried to run into my truck (stainless steel panels, yes please). The fuel savings would be large enough for me to notice and to care.TL;DR: This truck would work for me, as a truck. Sample size = 1.
  • Art Vandelay Dodge should bring this back. They could sell it as the classic classic classic model
  • Surferjoe Still have a 2013 RDX, naturally aspirated V6, just can't get behind a 4 banger turbo.Also gloriously absent, ESS, lane departure warnings, etc.
  • ToolGuy Is it a genuine Top Hand? Oh, I forgot, I don't care. 🙂