Car bosses want Chrysler impasse resolved soon

Like a second-hand-car salesman and a wary prospective buyer circling a well-used saloon, kicking tyres, shaking heads and sucking their teeth, neither the chairman of DaimlerChrysler, Dieter Zetsche, nor his counterpart at General Motors, Rick Wagoner, was saying much yesterday at the Geneva Motor Show about the vehicle in question - Chrysler corporation.

Maybe they were both unnerved by two other potential buyers reportedly lurking around the used car lot - Blackstone and Cerberus, private equity concerns which might have a very different vision for Chrysler in the future, by analogy stripping it for parts and scrapping what's left.

Most of the other potential Chrysler purchasers, from Renault to Hyundai, have left the scene. We now know that in December Dr Zetsche and Mr Wagoner had personally begun talks on a possible sale of Chrysler.

For his part, Dr Zetsche declared his "absolute confidence" in their Chrysler turnaround plan and that Chrysler would become profitable on the basis of that plan.

However, he also stuck to his statement of 14 February that "we could not answer that question [what was the best future for Chrysler and DaimlerChrysler] without analysing alternatives to the status quo". One of those alternatives, absorption by GM, was certainly not ruled out by Mr Wagoner.

Speaking to The Independent, the GM chairman indicated that he would like to see the speculation ended sooner rather than later, but wouldn't be much drawn on his company's intentions.

Intriguingly, he referred to GM's acquisition of Daewoo of Korea in the late 1990s, in which GM walked away from an initial deal that was "too rich", bided its time and in due course took over some of Daewoo's assets after bankruptcy. That is by no means a template for what might happen in a GM-Chrysler deal, but it suggests that GM may have a few game plans in mind.

Mr Wagoner also made clear his frustration that his company, unlike its foreign competitors, has to deal with vast social costs and has had to spend some $70bn (£36bn) "in cash" on healthcare and pensions provisions. He wondered aloud about what the opportunity costs to his company have been, from developing advanced new technologies to the "$50" upgrade to a model's interior that could make all the difference in the showroom.

He doesn't expect much help from the "quite free market" Bush administration - "if we wait for them and they don't [help], there could be catastrophic consequences" - so GM and its unions will have to "fix it ourselves".

He has no regrets about the bigger, less fuel-efficient cars GM came to depend on in America: on the contrary, he exudes pride that his company has "done such a terrific job" on large pick-ups and SUVs, where GM enjoys 40 to 70 per cent US market share, but wishes for that same "superior execution" in other sectors of the market such as conventional family saloons, where Honda and Toyota now lead the traditional US makes.

He hopes to "leverage resources globally" to help them back into those markets, including GM Europe's engineering resources and more compact models. He admits they made many of their own mistakes.

As for GM's remaining UK car manufacturing plant, at Ellesmere Port on Merseyside, Mr Wagoner was careful not to offer guarantees but sounded mildly positive. He had been visiting the plant, on and off, for 20 years and today it is "incredibly more competitive" than it was, and "it needs to be".

What's more, he revealed he had met Tony Blair at the London motor show last summer. He said: "I made the point to him that we like having a manufacturing facility in the UK because we sell a lot in the UK, so there's an exchange hedge that's good for us, so nobody's going to say 'here, we're going to get rid of this plant in the UK', but the flipside is we need to do everything we can to make that plant as competitive as possible. Recently, we've heard some more back about the commitment of the Government to support that and we continue to see progress there... strategically it's a good idea to have a base there."

Maybe one day they'll be making Chryslers there too.