Re:Comparison HP-Compaq/DaimlerChrysler Apt?
on
HP Buys Compaq
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· Score: 2, Insightful
Some things to think about before making a comparison:
-Automobile manufacturing is hugely capital, labor and material intensive compared to computers, so it is a far from nimble company to make changes in. The auto product is expensive to manufacture - but the difference between low and high end is rather narrow ($15K to $60K) compared to computers ($500 to $1G). Both are highly reliant on engineering, but autos use it more for design concept and execution - the basic premise and technology (i.e. the internal combustion engine) is virtually unchanged. Compare that to computers, which seem to have major changes under the hood almost yearly, not to mention software.
-As for Chrysler, they were already screwed, to pursue your analogy. They have always been overly reliant on inventory, since they never had the manufacturing capacity of either Ford or GM (or Toyota or Honda for that matter). Thus downturns would be ruinous - a circumstance that nearly led them to bankruptcy. Additionally, they never established a global presence - their efforts to establish themselves in European or Asian markets have failed miserably. Chrysler tried to compensate for these shortcomings by hoarding cash, which only made them a takeover target for Kirk Kerkorian and other shareholders; and by designing new products that were flashy and interesting (e.g the PT cruiser - nice look, lousy car).
-As for who got who consider this - Daimler's egomaniacal CEO, Juergen Schrempp saw an opportunity to be king of the mountain - he saw a company that on the surface had some interesting products and was number three in the U.S. The Chrysler team knew that without a global presence and having spent the cash to fend off Kirkorian and company, the company would atrophy over time, and so when Mr. Schrempp strutted into the boardroom, they knew they had a big one on the hook. They got the best terms they could, grabbed their golden parachutes and jumped out of the plane. Twelve months later, as the company bled red ink over Highland Park, Schrempp and a top lieutenant have stepped in, since it's now his ass on the line.
True, the end result may be that Chrysler maybe Daimler's "bitch," but they have been well compensated for the privilege, and not without giving Daimler a nice dose of the clap!!!
What Next - Dell and Gateway?
on
HP Buys Compaq
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· Score: 1
These mergers tend to run in waves - so would it make any sense for Dell to buy Gateway? Or does Gateway suck so bad that they offer NOTHING to Dellor anyone else?
Re:Dark Days are approaching
on
HP Buys Compaq
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· Score: 1
As usual. the devil is in the details, which are not yet obvious. The proof will be in the board structure and the CEO, which in turn will determine the corporate culture that prevails. If Carly and company remain, then the "dark days" may not materialize to the extent you believe they will. If somehow the Compaq culture manages to take over (not unheard of, even when the other company buys out) then you may be right. At this point I would bet on HP and Carly. But the decisions taken in the next six months, particlularly on R and D and new technologies they have or will acquire may be crucial.
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Some things to think about before making a comparison:
-Automobile manufacturing is hugely capital, labor and material intensive compared to computers, so it is a far from nimble company to make changes in. The auto product is expensive to manufacture - but the difference between low and high end is rather narrow ($15K to $60K) compared to computers ($500 to $1G). Both are highly reliant on engineering, but autos use it more for design concept and execution - the basic premise and technology (i.e. the internal combustion engine) is virtually unchanged. Compare that to computers, which seem to have major changes under the hood almost yearly, not to mention software.
-As for Chrysler, they were already screwed, to pursue your analogy. They have always been overly reliant on inventory, since they never had the manufacturing capacity of either Ford or GM (or Toyota or Honda for that matter). Thus downturns would be ruinous - a circumstance that nearly led them to bankruptcy. Additionally, they never established a global presence - their efforts to establish themselves in European or Asian markets have failed miserably. Chrysler tried to compensate for these shortcomings by hoarding cash, which only made them a takeover target for Kirk Kerkorian and other shareholders; and by designing new products that were flashy and interesting (e.g the PT cruiser - nice look, lousy car).
-As for who got who consider this - Daimler's egomaniacal CEO, Juergen Schrempp saw an opportunity to be king of the mountain - he saw a company that on the surface had some interesting products and was number three in the U.S. The Chrysler team knew that without a global presence and having spent the cash to fend off Kirkorian and company, the company would atrophy over time, and so when Mr. Schrempp strutted into the boardroom, they knew they had a big one on the hook. They got the best terms they could, grabbed their golden parachutes and jumped out of the plane. Twelve months later, as the company bled red ink over Highland Park, Schrempp and a top lieutenant have stepped in, since it's now his ass on the line.
True, the end result may be that Chrysler maybe Daimler's "bitch," but they have been well compensated for the privilege, and not without giving Daimler a nice dose of the clap!!!
These mergers tend to run in waves - so would it make any sense for Dell to buy Gateway? Or does Gateway suck so bad that they offer NOTHING to Dellor anyone else?
As usual. the devil is in the details, which are not yet obvious. The proof will be in the board structure and the CEO, which in turn will determine the corporate culture that prevails. If Carly and company remain, then the "dark days" may not materialize to the extent you believe they will. If somehow the Compaq culture manages to take over (not unheard of, even when the other company buys out) then you may be right. At this point I would bet on HP and Carly. But the decisions taken in the next six months, particlularly on R and D and new technologies they have or will acquire may be crucial.