Business, Finance & Economics

Desperately seeking foreign suitors

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Foreign affairs.

Everybody seems to be having them, especially America's Big Three automakers.

General Motors and Swedish Saab. Ford and Swedish Volvo. What is it about those Swedes?

And don't forget that Jaguar and Land Rover have been scooped up by a suitor from India. And already there is word that Volvo may end up in an arranged marriage with a Chinese benefactor — Geely Automobile Holdings Ltd.

But it is Chrysler that has really been on the prowl, seemingly with — as they used to say in far less politically correct times — "a girl in every port.''

Sail on, Chrysler.

Easy to say, not easy to do, when you're becalmed in an economic Sargasso Sea.

"By far, Chrysler is in a really, really bad spot'' among the Big Three, said Michigan-based auto analyst Erich Merkle. "Chrysler has so many different options right now, and all options are on the table."

Do you do what Ford is doing and stay away from government bailout money — at least so far — and try to avoid the puppet strings that come with federal aid?

Or do you look for a sugar daddy? They ought to take out a classified ad: "Mature suitor with lots of rumble left seeks rich and willing partner for wild flings over sand and rock, splashing through mud and water, comfortable family outings, cool cruising on urban streets, hot days on race tracks.''

This would refer to Jeep, the minivan (which Chrysler invented), and the 300 Series (which President Barack Obama drove until someone whispered in his ear that a hybrid might look better politically), and the snarling Viper.

And it's also a company that gave us such domineering and enduring model names as Imperial, Valiant, Ram, K-Car (never mind.)

But then Chrysler hooked up with a rich and refined German, who turned out to be a dominatrix with unexpected and severe Teutonic tendencies. So Daimler and Chrysler (suitably spanked) parted ways.

Where does this leave Chrysler, which is already taking billions in government aid, although it's unsure that much more will follow?

"In the near term, they've got to figure out how to make it through the next few months," Merkle said.

Chrysler, despite its legend, has neither the name nor Washington swagger of GM or Ford's Big Blue oval.

King Richard Lee Petty of NASCAR/Chrysler fame will not be walking through the door anytime soon.

And that's why you'll see U.S. senators from the south decrying federal aid to this struggling U.S. automaker — despite the fact that many of their states kowtowed to bring foreign auto plants — BMW, Hyundai, Honda, Toyota — to their districts.

So Chrysler becomes the weak leg on the milking stool.

And that could be very dangerous, according to Merkle.

"I don't see GM going away," he said. "I don't think the federal government would allow it."

Same, likely, with Ford.

But as Chrysler dances with ever more partners — Nissan, with whom it will build small cars and trucks, and Fiat and Renault — the courtships remain a sort of dangerous blind date with lots at stake.

Why?

Auto parts suppliers, said Merkle.

Should Chrysler, even as third weak leg on the stool, collapse, the folks who make auto parts — already seeking $25 billion in federal bailout money — could be devastated by the loss of business.

And that could have what Merkle called "a systemic effect" on the auto industry.

Suppliers would suffer greatly and parts for Ford, GM and even the foreign companies which rely heavily on them, would become scarce.       

Chrysler is thinking of shedding Jeep.

Ford may get rid of Volvo.     

All of the big three ought to be considering reducing the numbers of redundant models they produce.

And in a global automotive economy, the foreign companies had better hope the U.S. auto industry survives.

This is a series of courtships in which one failed relationship could shatter a global family.
 

Other dispatches by Royal Ford:

The world loves diesel

The beauty of diesel

The death of King Detroit?

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