China’s number 1 car manufacturer FAW (First Automotive Works) has shown interest in buying Chrysler, according to this article in Forbes. Last week I already heard this story from a friend in the automotive industry in Beijing, but I sort of dismissed it as a rumour (there had been stories before that FAW would like to buy Chrysler, even when it was not for sale yet).
It would be another major take-over for a Chinese company, after Lenovo’s take-over of IBM computer division. For Chrysler it would be the second take-over by a foreign company in less than 10 years. When Daimler-Benz ‘merged’ with Chrysler in 1998, I was working in the Daimler headquarters in Stuttgart. The German and US cultures were more different than people originally thought, and it took a lot of time to change the company culture. Although I have left DaimlerChrysler almost 5 years ago and I am not too much involved anymore, I still feel it is not one company yet. That fact, and especially the huge losses that Chrysler is generating, now leads Daimler to finally get rid of Chrysler.
If FAW should take over Chrysler, the employees will be in for a big surprise. German culture is one thing, but Chinese culture is a whole lot different. And I wonder what FAW will do with Chrysler, because I don’t believe they will simply keep production in the US. Labor costs are way too high, and working with US labor unions won’t be something FAW is looking for. The Chrysler brand may be interesting, but it would be a high price to pay just for the brand. Chrysler’s technology is not state-of-the-art, although they have some good research and development facilities.
I am not sure if FAW will succeed though, personally I think a US company like General Motors will have a much better chance in take-over negotations. But FAW’s move shows that China’s businesses are emerging on the world stage. Now it is still the US, but soon Europe will be the next target. Thanks to many one-sided media reports, most people there still have no clue what is really happening on this side of the world. Soon they might be in for a big surprise as well.