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Friday, April 23, 2004

Good for stock price, bad for products

Okay, the whole point of mergers and partnerships is to derive cost savings through the ability to use larger quanties of common parts or to sell more items that use a same number of common parts (same difference really). Since DaimlerChrysler (DC) owns about a 1/3 of Mitsubishi (MMC) DC decided to have Mitsubishi and Chrysler work together for small and medium sized automobiles. A twin Neon/Lancer and a Galant/Sebring/Stratus sibling platform. Sounds like a good idea to me. Yet now, DC wants to get out of the partnership?

Last week DC was talking about outright buying out MMC! I wonder if it would have been another hostile takeover...er 'merger of equals' that occured back in 1998 when Mercedes and Chrysler merged.

Here's the question, given the amount of engineering work that has already occured for the next generation of vehicles (it takes 3 to 5 years to design a car) how will this sale off/pull out affect them? Is all that work down the drain or will the current plans go through?

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