By now, the bleeding that is going on at Chrysler has attracted many sharks. The two biggest reports currently involve either General Motors or Nissan consuming the privately held automotive company in the near future – near enough that Chrysler has essentially stopped development of a latest and greatest replacement for the aging V-6 engine lineup. With Nissan and GM circling the SUV and truck-heavy brand, exactly which scenario would play out best for all parties involved as well as the local job markets employed by the companies? Ironically, both situations would mark a reunion of sorts for Jeep to past owners, but here’s our take on both situations:
The most prominent story right now is of a GM acquisition. Not only would this be devastating for Chrysler, but it a huge mark in the win column for the General being able to take out a major competitor. A major disadvantage for both GM and Chrysler in this situation would be the high amount of plant closures and job loss, not only in the United States but worldwide. Most likely, the Dodge and Chrysler brands would meet the same fate as Plymouth did in 2001, leaving Jeep somewhere along the lines of a booster to the HUMMER brand. This would mark the first time that HUMMER (or more so, its heritage from AM General) and Jeep have been under the same roof since 1983. Although most of Chrysler’s unit sales would be shed, the remaining additional sales could help GM take a big enough lead ahead of Toyota for top manufacturer in the world.
If Nissan were to acquire Chrysler, this could be looked at more as a merger than an acquisition. This would be the best possible scenario for all parties. Shedding overlapping models is still a definite concern for Chrysler’s three brands, but platform sharing with Nissan could bring Chrysler smaller, fuel-efficient cars, while Nissan would benefit from the truck and SUV platforms as well as the hybrid technology that Chrysler has already invested in. Currently, Nissan’s only hybrid vehicle is the limited production Nissan Altima that uses technology borrowed from rival Toyota. With the advanced technology behind the Chrysler-GM-BMW-Daimler two-mode hybrid system, Nissan could become the leading Japanese manufacturer
Currently, Nissan is the seventh-ranked automotive manufacturer in the world and a merger of this magnitude would dramatically increase Nissan’s annual sales numbers. Although a few models would undoubtedly be shed in this arrangement, Chrysler, Dodge and Jeep would continue to exist and could help put Nissan Motors in the fifth position (according to 2007 sales statistics) worldwide among automakers. If Chrysler were to become a Nissan subsidiary, it would put Jeep back in the same parts bin as Renault for the first time since Chrysler bought the Jeep brand from AMC in 1987.
In the end, we think the best chance for success might be with Nissan-Renault, but in this economic environment, GM may have considerably more pull. And when it comes to a tug-of-war, you always want to have more pull.