Ford/Chrysler Merger

Back in the early to mid 80s when Lee Iaccoca pulled Chrysler from the brink he proposed a merger between Chrysler and Ford.

Ford was economically stable and Chrysler was running lean.

As I understand it, the merged company would compete with General Motors more strongly, as GM’s 5 divisions overpowered Ford’s and Chrysler’s 2 each divisions.

The Merged company would consist of Ford, Lincoln, Chrysler, and Dodge.
Ford and Dodge Trucks would merge into a single marque and model line, as would Mercury and Plymouth, which would be a clearinghouse of badge-engineered models from the rest of the company’s line, as well as badged engineered Mazdas and Mitsubishis.

This would’ve been great for Iaccoca…ChryCo #1 man and former FoMoCo #2 man…being as he still had the largest amount of Ford stock shares outside of the Ford family itself.

Unfortunately, Mr. Henry Ford II…the man who FIRED Iaccoca in the first place…effectively put the kibbosh on the whole deal.

Do you see any problems with the proposed merger…reasons why it wouldn’t work?

Do you have any predictions of what the Merged Company would’ve been like?

Well, a lot of Daimler stockholders are up in arms about their company’s merger with Chrysler. I don’t know how the stock is doing now, but at one time, the Daimler stockholders were losing money hand over fist.

well, considering my experiences (and my family’s as well) with ford products, it would be the only thing that would prevent me from buying another Chrysler product

in my experience, every ford product i’ve had the misfortune of dealing with has been an unmitigated piece of Ebola ridden monkey excrement, ford makes the most unreliable pieces of crap on the market (again, that’s in my experience only), suffice it to say i will never own another ford product as long as i live

Chrysler products i’ve had good luck with, and would purchase another one in a heartbeat

i’d be afraid that the ford (nonexistent) quality virus would terminally infect Chrysler, killing it

suffice it to say i hate ford with a passion, almost as much as i hate m$, in fact, i call ford the “m$ of cars”, their products suck and they’re everywhere…

It wouldn’t have worked (not only for the reasons MacTech gives), but because of the nature of the culture at Ford. They want to be “top dog” and would have basically shunted Chrysler/Dodge/Plymouth to the shallow end of the pool until they completely died off. (You’ll note that the low-end Jag is now a reworked Ford.) What enabled Iacocca to turn Chrysler around was that he took all these ideas Ford had (like the minivan and front wheel drive cars), but wouldn’t do anything with, and began cranking them out the moment he took over the company. These ideas weren’t Iacocca’s, and once he’d milked his experience at Ford for all it was worth, Chrysler started faultering again (and Iacocca quickly found himself on the street).

Ford and GM both have a poisen pill. Their unfunded pension liabilities is likely to eventually bankrupt both companies. GM is in worse shape than Ford, but both are hurting. That or the US government will finally get national health care together and take on the burden. It costs over a thousand bucks extra per car for this problem.

Take someone like Nissan which is debt free.

Auto industry is in for hard times. There is global overcapacity and all (and I do mean all) of the majors are pumping something like $13 billion into China over the next 5 years to further increase global capacity.

It makes no sense to merge and become a weaker company. What makes sense is darwinian economics and let the weak die. Exactly what DCX is doing to MMC

If I recall the timeline correctly, Iacocca talked with Ford before Chrysler introduced the K-Cars and minivans. The company was deep in debt, had little to offer as current products (I think half the Plymouth and Dodge models were re-branded imports from Mitsubishi) and had already been passed by Volkswagen as the #3 automaker. Chrysler had already sold off some non-automotive operations to raise cash.

With the minivan (which Ford had already rejected while Iacocca was still there) and the K-Cars still only concepts, all Ford would have realistically gotten out of the deal was more manufacturing capacity (which they didn’t need) a couple of pretty good engines, a dispirited network of dealers that overlapped existing Ford dealers, and a lot of debt.

Funny that you should say that, MacTech. My thoughts are that it would have been as if Marylin Monroe expressed an interest in marrying someone like the guy in Grant Wood’s American Gothic. IMHO, while Chrysler has a history of making good-looking, powerful cars, their build quality sucked (and still did as of 2000, when I owned the last Chrysler car that I will ever buy) and they couldn’t get their act together to save their reputation. Iacocca had to fight to get ChryCo’s engineers and management to start acting like engineers and managers. Service quality at the dealerships is (and has been) an entirely hit-or-miss deal. From where I stand, it seems that Chrysler was running around making cool cars like there was no tomorrow, but nobody made any effort to make sure that the company or the cars were around tomorow.

On the other hand, while Ford may not have the best quality in the world, they still are to some extent the same company that dropped all racing in the 1970s, tried to sell safety in the Pre-Nader 1950s and who offered cars in any color you wanted so long as it was black. Sure, the 5.0 Mustangs were nice, but most of their stuff is made for a boring ride to the grocery store.

I hope that D-C will be able to instill some discipline into the Chrysler organization. I don’t think that Ford could have done that. It would have just been a bad marriage.

Another thing that really hurt Chrysler before Iacocca took over was that some genius had the bright idea of laying off the entire engineering and design departments. You know, to save money, and pay himself a fatter bonus. :rolleyes: