Chrysler is the company that barely makes it in good times and nearly goes bust in bad, here we go again. Lee Iacocoa re made the firm then Daimler bought it and now it is for sale for a fraction of the price that Mercedes paid for it. Read the latest about the April 4 shareholders meeting.
This raises all sorts of questions. How could someone as smart as Daimler have screwed this up (note my use of a popular MBA phrase here)? We use accounting information to make business decisions. Now it appears that the price Daimler paid was way too high. Were they wrong at the time or has bad strategy since muddied the marketing waters.
Jim Rogers says this is typical of most mergers, they are bad ideas, why was this a bad idea? HInt what about culture and product lines. Does this help you understand what makes a BLUE CHIP company. Blue chips make money year after year. They pursue a focused strategy of doing what they do best. They are well financed and well managed, typically holding on to valuable employees. They are forward looking. Yet there are of course success even among some failures, note Ford’s success with Aston and Jag that now they may have to sell. Gee, this is a tough business.
It is hard to stay on top, just ask K Mart, Dell, GM, the Dallas Cowboys, Britain, or Christy Todd Whitman. How do those stories contrast with say Johnson and Johnson or DuPont or Lands End?
The US companies want Chrysler for free, the sharks are circling, will Cerebus save the day?
Should the US Govt have a policy here, after all thousands of US jobs are at stake?
Does foreign ownership of US Assets matter, gulp…..
Will Chrysler survive or is this just another Studebaker, American Motors waiting to happen? Is it more likely that someone might keep Jeep and attempt to sell the remaining factories to foreign builders? Will the new owner demand concessions from states where the factories are located now to keep them open?
Stay tuned.
Professor Elam 
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