Another Letter to Steve Rattner, Car Czar: Combine GM and Chrysler

Posted by: Bruce Nussbaum on April 01

Dear Steve,

Back in June, ‘08, I predicted that Chrysler would fail and its key brands would be picked up by General Motors. It turns out that GM is failing as well, but it still makes sense for GM to pick up Jeep and some of the hybrid and electric cars Chrysler is developing with partners in China and elsewhere.

In many ways, it makes MORE sense to keep Chrysler American if jobs are the issue. The merger with Germany’s Daimler Benz was a cultural disaster and there is no reason to think that a merger with Italy’s Fiat will be any better. Fiat is also in a much weaker financial position than Daimler was in the last merger round. Will it have the funds to keep investing in Chrysler? And does Fiat have the technology for hybrids, pure electrics and other gas-saving technologies? It certainly doesn’t appear to be a global leader.

And finally, Chrysler has a legacy of great design and innovation. GM can use as much of that as possible. GM can’t really succeed just building hybrids. Every auto maker in the world is doing that now. GM has to innovate deeply, from its ideation to its distribution. Chrysler design people can help with that (if the good ones are still at Chrysler).

So Steve, please take a moment to think merger—between GM and Chrysler.

From your friend who still drives his 1996 Subaru Outback (can I get a trade-in deal from you?).

Bruce

TrackBack URL for this entry: http://blogs.businessweek.com/mt/mt-tb.cgi/