Weighing in on Chrysler Sale
February 22, 2007

UAW President Ron Gettelfinger had little to say about a speculated buyout of Chrysler by General Motors. “I have absolutely no opinion on that at all," said Gettelfinger, when he was interviewed on Detroit radio station WJR Wednesday.

Gettelfinger will have his say at some point. He’s one of 20 people on the DaimlerChrysler supervisory board; he’ll ultimately have to vote on the future of Chrysler.

Meantime, others are less reticent about commenting on Chrysler.

Roger Penske, CEO of United Auto Group, isn’t buying the GM-Chrysler merger.  “I just don’t see that at all,” he told Bloomberg News over the weekend at the Daytona 500. The overlap in models, I think that’d be awful tough.”

Penske wears a number of hats in the automotive industry and Detroit. The most recent added to his collection is national distribution rights for the tiny Smart car, a DaimlerChrysler product.

Meantime, Merrill Lynch analyst John Murphy gives a GM-Chrysler union 50-50 odds. “News reports of GM’s bid for Chrysler are everywhere and seem a bit of a stretch,” he says in a report. “However, given the transformation the U.S. industry is beginning, we would not rule out a tie-up.”

He’s leaning toward a scenario posed by AutoObserver this week – that a GM purchase of Chrysler would be a defensive, blocking maneuver, but with hugely disruptive short-term consequences.

“GM may view the acquisition as a defensive maneuver to box out new competition,” he says. “Possible synergies include leverage with the UAW, platform sharing in trucks and leveraging legacy assets. On the other hand, the hurdles of excess dealers and the dubious outcomes of past auto combinations are high. We don’t view the combination as overly compelling on its own merits, but it may be an important strategic move for GM.”

Posted by Michelle Krebs at 6:08 AM under Chrysler , Commentary | Comments (0) | digg this | Seed Newsvine