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Monday, May 14, 2007

Next Stop for Chrysler? Russia, of Course.

Chrysler Plymouth "Horizon" Circa 1978
People could get enough of them



You know you've really made it to the bottom of the barrel when you start thinking about salvation in Russia. It's perhaps comforting to know, though, that no matter how big a disaster you might be in the West you can always transplant yourself to Russia, where you'll be a leading light in no time. Perhaps, that's the function Russia will come to serve in the 21st century, a unique one in the history of mankind to be sure.

And so it is with quasi-American automaker Chrysler. Those familiar with the company's tortured legacy know that the company foundered in 1979 and only exists today because of an unprecedented U.S. governmen bailout (so much for capitalism!) signed into law by one-term left-wing president Jimmy "National Malaise" Carter just days before he left office. Despite that bailout, the company foundered again and was taken over by German automaker Daimler-Benz. And despite help from that vaunted bastion of excellence, last year the company reported its third disastrous annual profit statement out of the last five years, proving that nothing whatsoever could keep it from the scrapheap of history.

Nothing that is, except for Russia. BusinessWeek reports:
Magna International Chairman Frank Stronach, who is bidding for Chrysler, is betting big on Russia. Yesterday Magna announced Russian industrial tycoon Oleg Deripaska. Russia's second largest automaker GAZ, plans to take a $1.5 billion stake in Magna. If Stronach wins Chrysler, and Deripaska clinches the deal with Magna, Chrysler's future is driving east. Analysts say the three-way Magna-Chrylser-GAZ tie-up is brilliant. GAZ already has licensed the Sebring platform and purchased a Chrysler factory which it is transplanting in Russia. The Russian auto market is forecast to grow by 50 percent to 2.1 million cars by 2010, making it easy for newcomers to grab a slice of the growing pie. And with powerful partner like Deripaska, it's hard to see how Chrysler could stumble. It's still early days -- Magna hasn't won the bid for Chrysler yet. (A decision is expected by late June). But the opportunity for Chrysler, with an assist from the powerful Deripaska, to tap Russia's vast market and its low-cost manufacturing base is dazzling. Some analysts believe Chrysler could double its existing sales by racing into Russia, and use future models built in Russian to enter other emerging markets. That would help create the vital global business Chrysler needs to survive.
In other words, no matter how much your cars suck, even if Mercedez Benz can't make them better, they're still far superior to anything the Russians can do, so head East young (well, old) automaker!

But it works both ways, of course. If Chrysler, the Russia of American car companies, thinks Russia is a good place to be, then chances are that's the last place on Earth a sensible person should set foot.


3 comments:

Timothy Post said...

LoR:

I'm sitting here in Krasnodar totally amazed by the number of new foreign cars on the streets. Actually, Deripaska is pretty smart to make a bid for Chrysler. Not sure if you're actually in Russia but what's happening here, at in Krasnodar, is amazing from an economic point of view. Cranes dot the skyline as dozens of new apartment building go up. The speed of development here in Krasnodar makes Deripaska look very, very "umni" indeed.

La Russophobe said...

The members of the Politburo, too, were always amazed at Russia's breathtaking progress and achievements. Then, suddenly, they disappeared.

Just like you will.

PS: Don't know if you read the papers, but he didn't get it, you moron.

Anonymous said...

Timothy Post -

just ignore what you see, you are obviously brainwashed and living under an evil dictatorship.

Why, you can't even get powdered cane sugar, except for in Irkutsk, in deepest Siberia...and Tver. But if you can't produce a photograph of powdered sugar on sale in Anadyr, or if you can't find a Russian institution doing Google searches in English, or if it is reported in Russian newspapers but not in the WSJ, NYT, or Washington Post...then these must not exist. And if you don't care to predict the future, or you have a few typos, then you're a liar.

Just the fact that you're saying anything good about Russia posing as a foreigner probably means that you're a crazed Nashi youth on the FSB payroll.

No, only people in Russia are paranoid and hateful..not a well-funded anonymous blogging collective of old British males.

By the way, does anybody read Ann Coulter anymore?