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Reuters is now reporting that the Chrysler-GM merger (or sale, which is what it should actually be called) is moving forward. Or in their terms, the two have “cleared major deal issues.” The bad news arrives in the second sentence: “Both sides have agreed that GM Chief Executive Rick Wagoner would lead the combined automaker.” Other highlights: Reuter’s sources confirm the what many already suspected about this “merger” being more of a swap for GM’s remaining stake in GMAC. As Reuters observes, the biggest issue will be securing financing to make this whole debt-mess work and keep the companies afloat, and that’s where the White House and Congress will come in with their money printing press.
15 Comments on “Chrysler-GM Deal Moving Forward...”
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I think Wagoner should lead it. Right into the ground.
Why, why, why, is this still being considered?
My, my, Delilah.
I think we’ve covered the whys behind this deal. But I sure as Hell can’t wait for the official explanation.
Why would GM stoop even lower than they are? Crapsler? Really? Merge and sell I guess…
It makes sense that they would keep Wagoner, yaknow: “If it ain’t broke…”
On second thought, maybe that’s not the colloquialism I was looking for.
How about “Keep it stupid, simple!”
Yes, that seems to work.
My only hope is that they keep the majority of the Chrysler designs (mainly dodge/jeep) which I feel are vastly superior to the GM versions (G8,CTS…and probably Malibu excepted)
I’d say this is much more of a “merger of equals” (can’t wait for them to whip that one back out) than Chryslers little adventure with MB. The only problem is that they’re both equally crap.
Someone needs to do a rehash of the NY Central/Pennsylvania RR merger. We know what happened there.
This would not be a bailout for GM it would be a bailout for Chrysler. GM would get bailout bucks without the Chrysler merger. Any of the arguments in support of the bailout apply to GM alone and nearly all of the coverage of this in the MSM has centered on GM’s financial situation.
Chrysler on the other hand can’t as openly easily be bailed out becuase it is held by a cash flush Private Equity firm known for stripping and flipping companies. With a call on Cerberus’ $7B in loans they need to sell, lest they wind up actually spending any of their own money on this deal.
But what happens if nobody bails Chrysler out? They’ll have to either a. Invest their own money into turning Chrysler around or b. Declare their limited liability holding bankrupt and file for CH11 protection. Unfortunately for Cerberus, Delphi’s CH11 has shown that the evil host company doesn’t just get to walk away from its criminal negligence obligations, which leaves option b still draining precious money from the good dogs Cerberus. So if no bailout is offered to Chrysler they are still assured funding from their rich masters.
And bailing Cerberus out on their own is no less politically unpalpable than paying off Cerberus’ debts to J.P. Morgan, et al. and then facilitating the certain doom of the US auto industry.
That leaves the other question. Why would GM want Chrysler? They know they will not be allowed to fail. If GM goes down they take Ford and Chrysler with them and anyone mildly involved governing or managing knows that. GM is guaranteed a bailout. There can not be a financial motive for this. Not only will GM get less money by merging with Chrysler than they would on their own, they’ll lose epic amounts of money immediately after that. Come on, even Rick Wagoner is not that stupid.
“Both sides have agreed that GM Chief Executive Rick Wagoner would lead the combined automaker.”
Oh, the humanity.
Living in Australia, something you often hear said about the USA is “only in America”. That’s what we were saying when George Bush junior was elected president – TWICE. But even that seems like a sensible decision compared with installing Wagoner as head of this merged GM / Chrysler debarkle.
I work for Holden ( General Motors in Australia) and every day I go in to work and check the intranet hoping to see that Wagoner has been fired or resigned or something. I would love to know what sort of blackmail he has over the other board members.
I am just staggered that this merger could happen with Rick running the show.
Why is Wagoner still here? An American killed JFK, killed RFK, tried to kill Reagan, tried to kill Teddy Roosevelt, and killed Abraham Lincoln. Yet not one bullet–not even an attempt on Wagoner’s life by a disgruntled employee or something.
I’m not saying Wagoner should be shot, I’m saying our priorities are totally wrong. We get rid of the cream of the crop, and then eat the rest like pigs. Which probably explains why Wagoner got to lead GM in the first place.
Or something like that.
Ken Elias :
October 29th, 2008 at 7:42 pm
Someone needs to do a rehash of the NY Central/Pennsylvania RR merger. We know what happened there.
Yup. I’ve been saying “this has Penn Central written all over it” since first hearing of the idea. We can only hope that American Leyland turns out as well as Conrail.
“Both sides have agreed that GM Chief Executive Rick Wagoner would lead the combined automaker.”
This has got to be one of the signs of the apocalypse.
Why why why? The world is confusing THIS is insanity. At least we know things will never change and Robert lots to write about for a very long time. It’s like picking the captain of the Titanic to steer a fleet of cruise ships while the Titanic is taking on water, MADNESS!
Why, why, why are Americans sitting on their big wide duffs doing nothing while their guv’ment ROBS THEM BLIND and gives all their ass(ets) to the F@#&ing Multi-Millionaires? Where are the Thomas Jeffersons, Nathan Hales, George Washingtons of OUR age?
The very LEAST we could do is vote EVERY SINGLE ONE of the MFing incumbents out of office, REGARDLESS of party affiliation, JUST VOTE NO to ALL of them. (Except Ron Paul, I think he’s the only American left in Congress)
Just maybe … they know it won’t work and Rick will be the “fall guy” since we all know it this ship will sink with him at the helm.
I think I see him standing on the bow of the Titanic pretending to fly…
Kurt.