Saturday, June 6, 2009, AM | Leave Comment
General Motors is breaking up. For so many years, it was a symbol of American ingenuity, innovation and at one time luxury as well. Foreign entities are rumored to snap up the broken pieces one by one. What if they actually succeed in overcoming the regulatory hurdles and what if they all succeed in bringing the pieces to their profitability, I think, then, it would be a shame for American high brass and a slap on their faces. Why everybody else could do it and not them. And if the dismantling worked for foreign or domestic companies, how come it was not thought of and worked out before.
Rumor has it that there are some buyers that are ready to gobble the pieces:
Italy’s Fiat SpA is waiting for U.S. courts to approve its acquisition of Chrysler LLC’s assets. Fiat’s takeover of Chrysler, in its final stages, follows a more traditional logic. CEO Sergio Marchionne has been studying U.S. plants for ways to raise efficiency, and will retool one so he can start making the stylish compact Fiat 500 and a sporty Alfa Romeo or two. Under terms of Chrysler’s bankruptcy plan, it will close five more U.S. plants.
More foreign car brands could find their way into American garages under a plan by auto racing magnate Roger Penske’s dealership group to snap up Saturn from the ruins of General Motors Corp.
The deal announced Friday is another example of how the cataclysm that hit Detroit’s three car makers is reshaping the global automotive landscape in profound ways, reducing their worldwide influence and — if Saturn turns out as Penske envisions — opening new markets to smaller companies.
Penske, who already runs Penske Automotive Group Inc., the second-largest U.S. dealer network, thinks his business model is different enough to be successful.
Hummer may be going Chinese, although state media there reported Friday that the deal has hit regulatory hurdles.
- Adam Opel GmbH
GM has worked deals to turn its German subsidiary Adam Opel GmbH over to a Canadian auto parts company with Russian backing.
In a Nutshell
Industry experts are doubtful that the flurry of mergers and alliances will be any more durable than failed marriages of the past, such as Mercedes and Chrysler, proving to be just one big distraction from the underlying issue that made them so vulnerable in the first place: making more cars than people can buy.
Such strategies have raised the obvious question among analysts: If the industry is being strangled by overproduction, why not just let the gasping giants expire?
A big exception is Volkswagen AG, which gathers multiple brands from Bentley to Lamborghini to Skoda under one roof. But it took 20 years to bring them onto the same technical platforms.
Analysts say bigger isn’t always better, as evidenced by GM’s efforts to shrink itself to become profitable.Facebook.com/doable.finance