THE BEST OF CHRYSLER

Dieter Zetsche, left, and Tom LaSorda: After a stormy corporate marriage, is divorce ahead?

DCX is shopping this ailing American icon. If GM -- or someone -- snaps it up, here are some jewels worth keeping

Bradford Wernle | Automotive News / February 19, 2007 - 1:00 am

DETROIT -- Dieter Zetsche put Chrysler on the table last week.

What if General Motors or some other carmaker decided to pick it up?

How would GM proceed, and what would it mean for the Chrysler group's dealers and suppliers? And what's in Chrysler's cupboard that's worth raiding?

For historical guidance, turn the calendar back 20 years to the last time one Detroit carmaker swallowed up another after acquiring it from a European owner.

Chrysler Corp.'s purchase of American Motors from Renault would be a likely template for a GM takeover of the Chrysler group. Like Chrysler back then, GM probably would liquidate most of the hard assets and make the Chrysler-Dodge-Jeep business a marketing division of GM.

Similar to Alpha

At the retail level, GM could combine the best of Chrysler into a single Chrysler-Dodge-Jeep dealership network, similar to the Alpha stores many Chrysler group dealers already operate. But GM or another purchaser could keep only Chrysler's strongest products.

The new dealers likely would sell:

• Stow 'n Go minivans
  
  
• Chrysler and Dodge rear-wheel-drive cars, including the Chrysler 300 and Dodge Charger
  
  
• Dodge Ram pickups
  
  
• The Jeep Wrangler, Liberty, Grand Cherokee and Patriot.

Along with these would come the popular Hemi performance engine brand.

More than brands

But brands aren't all a buyer like GM would get. Chrysler still has a lot of engineering talent and one of the industry's best design departments. And Chrysler has more good will with its suppliers than do GM or Ford, according to Planning Perspectives Inc., which surveys supplier relations with automakers.

The best of Chrysler's assembly plants could fit into GM's network, including:

• Toledo Supplier Park, which makes the Jeep Wrangler
  
  
• Brampton, Ontario, which builds the Chrysler 300 and the Dodge Charger and Magnum
  
  
• Windsor and St. Louis, which make minivans
  
  
• Belvidere, Ill., which builds the Dodge Caliber and the Jeep Compass and Patriot.
  
  
• Toluca, Mexico, where the PT Cruiser is made.

Meanwhile, the industry is watching how Chrysler's partnership with suppliers works at Toledo, and how its Global Engine Manufacturing Alliance with Hyundai and Mitsubishi pans out in Dundee, Mich. Early reports are favorable.

The intangibles

There are intangibles, too.

"In all of these kinds of transactions, it's incumbent upon the acquirer to do everything to retain the talent and therefore retain the attractive parts of the culture of the targeted company," said John Casesa, an analyst for Casesa Shapiro in New York.

"That was one of the failings of the original (DaimlerChrysler) merger. There was lots of talent at Chrysler, and when nothing happened, a lot of those guys walked."

Several AMC leaders became stars at Chrysler -- such as product development bosses Francois Castaing and Chris Theodore and public-relations boss Steve Harris, who now is head of public relations at GM.

There's also the comparatively freewheeling culture at Chrysler, which is widely regarded as the least uptight place to work among Detroit's automakers.

Interesting possibilities

John Lawson, an analyst for Citigroup in London, says it makes a lot of sense for U.S. automakers to talk about cooperating in areas such as pickups and SUVs, since there is overcapacity in those areas.

"If there's a way to put some of this capacity, technology and r&d together, that's where a trade buyer like GM could find some synergies," Lawson said.

But GM could face political fallout and potential antitrust issues. And sorting out the dealer network would also be a formidable issue.

Auto companies talk with each other all the time. Last summer, GM and Ford Motor Co. talked about an alliance. Those talks stalled after Alan Mulally took over as Ford CEO in September. These talks may well stall as well.

Or they could change the landscape of the U.S. auto industry.