When the historians chronicle Detroit’s decline and fall, Daimler’s rape and pillage of the storied American car brand will merit an entire tome. In short form, the Germans came, they saw, they laughed, they lunched, they left. And when they left, they maintained a 19.9 percent share in the hollowed-out American automaker. Wishful thinking? Tax law? A codicil from Cerberus to allow Chrysler’s new masters to sue the shit out of the Germans if things went badly? In any case, thanks to The Presidential Task Force on Automobiles determination to reconstitute Chrysler as a worker’s co-op, by Friday, Daimler gets to see Chrysler implode from afar. [NB: So much for the “The Big 2.8”.] Bloomberg reports that Daimler will “cede” its remaining its stake in “former U.S. division” (ouch) to Cerberus Capital Management LP. More to the point, the “transaction” will result in a $700 million write down in the second quarter. Oh, and Daimler will “forgive” $1.3 to $1.7 billion worth of “loans” to Chrysler. And “contribute” $600 million to the US automaker’s pension plans over the next three years. Meanwhile, Daimler’s own haus is on fire . . .
Even with cash4clunker mania sweeping its domestic market—and zen ze world!—the German automaker is not doing well in the current economic doldrums. It’s just posted “its first back-to-back quarterly losses in at least 10 years.” (How precise is that?)
The first-quarter net loss was 1.3 billion euros ($1.7 billion), or 1.40 euros a share, Stuttgart, Germany-based Daimler said today in a statement. The loss was wider than the 790 million-euro median estimate of a Bloomberg survey of 13 analysts. Daimler shares fell as much as 8.4 percent.
Oops.
$600m seems such a small sum in light of all the billions that have been pissed into Chrysler now. The fact that Daimler destroyed Chrysler in search of operating capital is one thing, for them to be able to walk away smelling somewhat rosy (comparatively speaking) is just bullshit. They should keep their 20% and be dragged into the shitter with the rest of Chrysler’s owners and investors. Instead of just taking our money, why hasn’t Super-O gone after them for some bailout bucks?
Wrong – $600m is only the imminent amount needed as first installment on a far more hefty ransom.
The total Daimler has to pay for getting the useless scrap metal (they thought mistakenly as a gem) off their backs is 1,3 billion Euro – about 1.7 billion$ over the next 24 moths.
Given who gets what for what its more close to a:
“the Germans came, they saw, they laughed, they lunched, they where first screwed and then robbed”
Americans found obviously a way how to make out of their led gold from other folks pockets.
Eat the cake, have it payed twice by others and at the same time keep it 100% for themselves- feed on the whole thing for free and claim on the side at the same time they lost a fortune by acting as good fellas.
This I agree with. If/when Chrysler goes C7/C11/merger with Fiat the blame for what happened is TOTALLY with Diamler.
The Sebring/Avenger designs, the “crude” interiors, etc are all due to Diamler. If you look back to Chrysler pre-takeover, they had money in the bank, several good looking cars and a decent rep.
Diamler stomps in and, while giving them the 300/charger/magnum/Challanger, the rest of their designs were acceptable at best.
If Chrysler does die, their blood is on Diamler’s hands.
I wouldn’t lay the blame of Chrysler’s demise at Daimler’s feet. Was the Sebring/Cirrus ever a great car, much less a good car? No. The “cab forward” cars of Chrysler were pre-Daimler and none of those cars were particularly good.
Chrysler has made some decent minivans and some pickup trucks that sold very well. The PT Cruiser had some good years, and the post-Daimler Chargers and 300e models had some good years too. But like everyone else inside the bubble known as “Detroit,” they all thought they couldn’t make and sell a decent bread-and-butter sedan or compact or sub-compact. And for the most part, they were right, but only because they rarely tried.
@Polishdon: Daimler’s fingerprints will be the ones on Chrysler’s corpse, but there are many others who didn’t help: Kerkorian and Eaton, to name a couple.
Daimler is, as announced today, already in deep, deep red figures.
Not because Daimler/Mercedes dont know how to produce and sell excellent cars and turn a profit (opposite to Chrysler they can and still do so) but mostly due to the failed engagement with the drunken bump Chrysler.
If Daimler goes the way of the Studebaker, its Daimlers blood on Chryslers / UAW hands – while wagging with Daimlers money in the direction of the next bar do water a little more …
that time not at the German but at the US taxpayers stuffed bar.
“Cheers’ – to your health!”
Robert Frankfurter: Not because they dont know how to produce and sell excellent cars (they can and do so) but mostly due to the failed engagement with the drunken bump Chrysler.
That’s an interpretation of history that relies on wishful thinking instead of facts.
Chrysler was a healthy, thriving automaker when Daimler merged with it. Daimler proceeded to raid Chrysler’s funds and dismantle the product teams that had dramatically improved Chryslers, Dodges and Jeeps.
Daimler’s quality was already declining when it merged with Chrysler. Mercedes reliability was an embarrassment compared to Toyota and Honda, let alone Lexus.
Daimler’s Alabama plant was also a quality disaster. And before you trot out the tired, old “American Southerners are too dumb to build cars properly,” please note that Toyota, Hyundai and Honda have all located plants in the American South, and the vehicles produced by those plants sell well and score highly on surveys.
The problem is that Daimler, like VW before it, cannot manage plants well in overseas locations.
Robert Frankfurter: If Daimler goes the way of the Studebaker, its Daimlers blood on Chryslers hands – while wagging with Daimlers money in the direction of the next bar do water a little more …
that time not at the German but at the US taxpayers stuffed bar.
I see that denial isn’t just a problem in Detroit.
Those whom the Gods wish to destroy, they introduce to the Germans……
The reporting I’m seeing says Daimler will forgive $1.5 to $1.7 billion in loans and pay $600 million over the next three years. So it’s apparently worth $2.1 to 2.3 billion to not own 20% of Chrysler.
EDIT: Was the headline something different before or did I just imagine that I had an original thought?
Daimler-Benz 2009 is at least as screwed up as GM 1999 was.
Ineffective response to competitors, over proliferation of slow selling niche models, endless head office intrigues, and arrogant dismissal of customers who have gotten stuck with incompletely developed products. Once produced the objects of desire, now the objects of scorn. Yep, sounds like Daimler or GM.
Mercedes-Benz is very successful producing in many countries worldwide – including in China (where they produce Mercedes partly 100% locally) only in the communistic styled UAW country Mercedes failed with his partner – but the rider Daimler jumped under steep costs the lame horse Chrysler in mid-race now and will (given, not win the race) but at least most probably survive the experiment – thats not so sure for the local horses remaining on the tracks…
…according to the most recent US news the private auto-sector (besides many banks) will go straight the way of Karl Marx – and turn into state run “private” enterprises
I find the death of Chrysler really fascinating.
The replacement of the Neon with the turd know as the Caliber is certainly a big part but I really think this may be the first time in history that a brand was killed by shity interiors.
In my opinion in a few years the Chrysler debacle will be summarized by “bad interiors and some other stuff.” I never would have believed it was possible. Looks like Daimler didn’t either. Who would of thought that people would resist buying a car that screamed “CRAP” at you everytime you got behind the wheel. I remember buying my first Audi for just the opposite reason.
Robert Frankfurter: Mercedes-Benz is very successful producing in many countries worldwide – including in China (where they produce Mercedes partly 100% locally)…
Yet the company is still losing money.
Robert Frankfurter:…only in the communistic styled UAW country Mercedes failed with his partner – but the rider Daimler jumped under steep costs the lame horse Chrysler in mid-race now and will (given, not win the race) but at least most probably survive the experiment – thats not so sure for the local horses remaining on the tracks…
Yet, Toyota, Honda, Nissan and Hyundai have all succeeded in the U.S. And please note that the Daimler plant in Alabama is not unionized.
Robert Frankfurter:…according to the most recent US news the private auto-sector (besides many banks) will go straight the way of Karl Marx – and turn into state run “private” enterprises
GM wants to the federal government to exchange debt for stocks (i.e., an ownership interest). This is very similar to the arrangement that VW has had with the German state where its main facilities are located.
This whole raping and pillaging theme is naive and simply wrong and I’m surprised that RF seems to fall for it when he usually sees the truth.
Chrysler weas never really viable. They had a couple of good years in the late 1990s and that’s it.
The probems went a lot deeper than Daimler. To say that Daimler got a free lunch is insane. Conservative estimates say that all in all, Daimler lost €50b with its Chrysler adventure, other analysts claim that the amount of money lost is somewhere north of €100b. In any case, it’s clear that large sums went from Stuttgart to Auburn Hills. Even though mistakes were made after the merger, without that money, Chrysler wouldn’t exist anymore if it wasn’t for Daimler.
tom: Chrysler weas never really viable. They had a couple of good years in the late 1990s and that’s it.
Chrysler was doing quite well in the 1990s. There is no proof that Chrysler was not a viable company in 1998.
tom: To say that Daimler got a free lunch is insane.
Any money lost was Daimler’s fault. It completely mismanaged the merger. It correctly identified a weakness – Chrysler’s warranty costs, which reflected its quality (or lack of it). The problem is that Mercedes quality was heading for the toilet at the same time. And Daimler did next-to-nothing to improve Chrysler quality, while even GM and Ford have made big strides in this area.
Meanwhile, the rigid German management structure made the wrong call on Chrysler’s greatest strength – its innovative method of developing cars and trucks that pushed responsbility to lower levels. Daimler mistook this for anarchy, and proceeded to dismantle Chrysler’s greatest strength.
tom: Conservative estimates say that all in all, Daimler lost €50b with its Chrysler adventure, other analysts claim that the amount of money lost is somewhere north of €100b. In any case, it’s clear that large sums went from Stuttgart to Auburn Hills.
If Daimler mismanaged the merger, then that is its fault. Daimler was clearly the dominant partner. It has no one to blame but itself.
Daimler merged with a company that possessed substantial market share, a good dealer network, and strong entries in the hottest segments of the market (at that time). Instead of building on those strengths, Daimler instead either ignored them or milked them dry, and in the process ran the company into the ground.
Having been to Germany, and having German relatives who work in the German auto industry, I know that they view it as Americans viewed the Big Three in the 1950s. The problem is that there are some big chinks in the armor, but, as I said, denial isn’t a problem limited to Detroit.
Daimler may have thought they were doing the screwing but they are the ones that got screwed. The jerk-off’s paid $36 BB in early 1998 for Chrysler Corp. and had to essentially pay cash out to ditch it only nine years later.
It’ll be a tome all right and probably a Harvard Business School Review case, “Incredibly Dumb-A$$ Business Deals.” Daimler got what they deserved.
So assuming “Good Chrysler” is worth something, we would have to deduce from this move that 20% of “Bad Chrysler” is worth less than negative $2.3 billion, thus putting the value of “Bad Chrysler” at less than negative $20B.
@geeber
Of course only Daimler is to blame for the losses Daimler made. No question about it. All I’m saying is that it wasn’t Daimler who was milking Chrysler but exactly the opposite.
Looking back, Daimler should have dissolved Chrysler within the new corporation. They should have ended any R&D at Chrysler (at least in the car segment) and instead handed them down old Mercedes platforms.
Daimler however tried to preserve Chrysler as an entity which caused lots of problems adjusting to one another.
But even in this scenario, there would have been the high legacy costs. That alone would have been enough to deal a death blow.
Remember that in the 1990’s when many decisions were made that now appear to be costly mistakes there was a sense that business needed to become more global. This resulted in many companies looking to increase their presence in other countries. Until oil jumped to over $100 per barrel many of these global strategies seemed to be working. Now there are new rules, and being a global company may not be as profitable as it once was.
Yet another Daimler:GM parallel: Both companies have their ardent fans who will broach no criticism of management’s failures whilst laying blame for all problems at the UAW’s doors.
Gong.
“Daimler however tried to preserve Chrysler as an entity which caused lots of problems adjusting to one another.”
When the merger happened, Daimler and Chrysler both went to extraordinary lengths to present it as a “marriage of equals”. They called the new company DaimlerChrysler and listed it on the New York Stock Exchange. Globalization was the buzzword of the day, and I bet that the investment bankers and consulting firms brought in big fees for their most excellent advice to the marriage partners.
TRL:
“I find the death of Chrysler really fascinating.
The replacement of the Neon with the turd know as the Caliber is certainly a big part but I really think this may be the first time in history that a brand was killed by shity interiors.”
Fortunately that’s becoming a thing of the past. If you check out the new interiors in the Patriot, Ram, Challenger, and the new Grand Cherokee that should be available in spring 2010 you will see remarkable improvement. All done since Daumbler divested itself from day to day control of Chrysler less than 2 years ago.
tom:
“Chrysler weas never really viable. They had a couple of good years in the late 1990s and that’s it.”
If you believe that you must still think there are weapons of mass destruction in Iraq. I had a neighbor who worked at a Chrysler plant in the 90’s. One year his profit sharing check was $7000. Another year $4000. And that’s on top of his regular pay which being in the UAW was quite good (more than I made at the time, and I was working in the ‘hot’ information technology industry). Chrysler was not only paying dividends to it’s shareholders, it was banking a “rainy day fund”, estimated to be at $10 billion for the next economic downturn. All while funding new product development.
I presume that Chrysler would have sucked, with or without Daimler. Before Daimler, it was an also-ran, which was good at spawning some great hit products (minivans, PT Cruiser, SUV’s), but not particularly good at maintaining leadership in those spaces, or in using them to build their overall brand reputations.
On the other hand, Daimler never quite understood the American consumer. The German model is to sell highly optioned versions of European-market cars to Americans at high prices. That is a niche market that is necessarily going to be small, because the prices are high and little effort is made to address the differences between the American and European car buyer.
That’s good if you are a fan of German cars, because that keeps them unique and worth buying if that floats your boat. But that also puts a lid on how much market share that they can expect to get, because they don’t do all that much to accommodate American tastes, aside from building SUV’s that almost seem like an afterthought. More importantly for Chrysler, that put a limit on the kind of knowledge transfer that one could expect from Daimler, because what Daimler learned about the US consumer from its Mercedes sales wasn’t very useful for dealing with Chrysler’s audience. Different demographic, different price points, different preferences, different lessons.
Daimler merged with a company that possessed substantial market share, a good dealer network, and strong entries in the hottest segments of the market (at that time). Instead of building on those strengths, Daimler instead either ignored them or milked them dry, and in the process ran the company into the ground.
In my opinion, you’re way overselling Chrysler’s strengths of the time, but your points are valid. In M&A, the acquiring firms are often arrogant, acting like victors in a war reigning over the defeated. Since the purchased firm was weak enough to be acquired, it is assumed that they are incompetent and not worth listening to. It becomes an ego contest, which helps to explain why most M&A deals end up creating no value or destroying shareholder value, instead of adding benefit.
The problem facing companies like Daimler is that while they need to expand if they wish to avoid being acquired themselves, the only companies available to purchase are the ones that aren’t very good. If they could just buy Honda, that would solve a lot of problems, but their choices aren’t that good.
GM was the leader in automotive M&A, and we can see what good that did them. The best path, in theory, is the organic growth model used by Toyota, but Daimler is well behind and probably needs to go shopping (again) if it wishes to avoid becoming someone else’s meal.
@John Horner:
Since you quoted me, I guess you’re talking about me. I however never defended Daimler management, on the contrary. Of course it was Schrempp’s fault to chain his company to Chrysler, a dead firm walking.
On top of that, he also screwed up the “merger”. To sell it as “merger of equals” was a political decision and with it came other decisions like keeping the Chrysler part intact. I’m not denying that many mistakes were made on the part of Daimler.
@ windswords:
I don’t see how anything you’ve written contradicts my posting. Of course you’re right, so what?
@geeber wrote:
Robert Frankfurter:…according to the most recent US news the private auto-sector (besides many banks) will go straight the way of Karl Marx – and turn into state run “private” enterprises
GM wants to the federal government to exchange debt for stocks (i.e., an ownership interest). This is very similar to the arrangement that VW has had with the German state where its main facilities are located.
mr. geeber: your absolutely correct – both, the German & USA governments are heading full throttle toward restoring communism.
What else is a “debt for stocks” deal, in which a government takes ownership (with helpless taxpayers money) of a failed private enterprise and controls the board then commies reloaded?
the German & USA governments are heading full throttle toward restoring communism.
Here we go again…
Communism would entail full nationalization of the entire industry, done for ideological purposes or for theft.
Nothing of the sort is happening in the US. The government is targeting specific companies due to their ability to damage the broader economy with an untimely failure, with the ultimate goal of cashing out when possible.
A communist government wouldn’t be trying to actively re-privatize these assets, as is happening here. There is simply no comparison whatsoever, and the continued use of these buzzwords just degrades the language by blurring the difference in definitions of words that serve to distinguish them.
It also shows a general lack of knowledge of economic theories and what makes them different. Except for a few nutters who mistakenly believe that Ayn Rand was an economist instead of a two-bit hack novelist, this is not a two-extreme universe comprised strictly of freedom-hating communists and daring, independent laissez-faire/ anarcho-capitalists.
@Pch101 :
Communism would entail full nationalization of the entire industry, done for ideological purposes or for theft.
Nothing of the sort is happening in the US. The government is targeting specific companies due to their ability to damage the broader economy with an untimely failure, with the ultimate goal of cashing out when possible.
Problem is – that contradicts the core elements of capitalism e.g.
he survival of the fittest.
Supporting a failed enterprise by injecting taxpayers money is not only against capitalistic fundamentals, unwise as you you cannot resurrect a dead horse anyhow no matter how much money you throw at it, but is also grossly MOST IMPORTANT unfair to all able, sound & fit competing companies.
And thats my point – the failure of the big tree will not be the end of US car-production but will in contrary help the fittest around to find new ground.
State intervention – undisputed – hinders that
that contradicts the core elements of capitalism e.g.
the survival of the fittest.
I understand — you have a very limited, textbook view of what comprises a free market economy, and mislabel anything that doesn’t fit into that box as “communist.”
Here’s the problem with your view — nobody in the real world who impacts policy and drives the economy believes what you have to say. Your view is not realistic, nobody practices it, and those who make this system work don’t particularly even agree with it.
Most of us function on some sort of free enterprise model, that doesn’t value Darwinism above everything, but some combination of competition, low inflation, reasonable levels of unemployment and consumer choice.
That’s part of the problem with discussing this subject. Hardcore ideologues misname everything that they disagree with as “communism”, when they bear absolutely no resemblance to communism. In an econ class, you’d get a “F” for that sort of sloppy use of the language.
Pch101: In my opinion, you’re way overselling Chrysler’s strengths of the time, but your points are valid.
I was reacting – perhaps overreacting – to the charges that Chrysler was dead in the water when Daimler merged with it in 1998.
Chrysler had its problems in 1998, that is certainly true, but I believe that the right partner could have built upon what was there to make a strong company. It didn’t have to end this way…
I was reacting – perhaps overreacting – to the charges that Chrysler was dead in the water when Daimler merged with it in 1998.
You’re right that it wasn’t exactly dead in the water. But its path forward was not particularly clear, either.
If it followed its usual path, my guess is that Chrysler would have dropped the ball yet again, and floundered until it came up with another miracle product to save itself temporarily, until the cat burned through its ninth life and didn’t make it for the next comeback. There just seems to have been no coherent strategy.
The problem is that Daimler never understood the US market and never understood the “mass market”.
Also they had a certain feeling of superiority against their counterparts at Chrysler.
If you look at the current offerings of Daimler over here in Europe you see that they have a very hard time to keep up with Audi and BMW in a segment they once owned by default.
Jürgen Schrempp was a manager that was perhaps even worse than Mr. Wagoner. He not only ran one company to the ground, but merely two (Chrysler AND Daimler). So don’t blame me as a German, blame this arrogant manager type.
“@ windswords:
I don’t see how anything you’ve written contradicts my posting. Of course you’re right, so what?”
If you think a company that makes billions in profit a year, increases market share, pays it’s rank and file large bonuses, has a fully funded product development program, AND saves $10 billion in a reserve fund is “not viable” and a “dead company walking” then yes, so what?
“If you think a company that makes billions in profit a year, increases market share, pays it’s rank and file large bonuses, has a fully funded product development program, AND saves $10 billion in a reserve fund is “not viable” and a “dead company walking” then yes, so what?”
Today, we’re looking at it in hindsight. Of course back then, things looked great for Chrysler. Daimler didn’t pay €30b for nothing.
But today we know better. Today we know what happened. We know how the oil price developed, how Truck and SUV sales have tanked, how the overal market is in decline, how shrinking companies cannot pay for their emplyees retirement benefits and health insurances. $10b wouldn’t have been enough to keep Chrysler floating without Daimler. Chrysler would already have vanished, simply because their business model which was so successful in the 1990s was totally inept for the new millenium.
Of course it has to be said that Schrempp had a big ego, but he was even worse than Wagoner. He singlehandedly destroyed Daimler-Benz Aerospace by aquiring Dornier and Fokker. Both of which looked good on paper but turned out to be bottomless pits. Instead of getting fired, he got promoted and became CEO of Daimler-Benz where he repeated his mistakes with Chrysler and Mitsubishi. Again, this looked good on paper, but they were bottomless pits and he should have known better.
@Pch101 :
I understand — you have a very limited, textbook view of what comprises a free market economy, and mislabel anything that doesn’t fit into that box as “communist.”
Your probably right -everything depends where you stay and the angle from which you look at. And I lived in a communistic country more then half of my life.
And when I see a UAW / government taking over a controlling stack on a former 100% private (in fact dead in the water) entity, I fail to see (opposite to your view) that as a healthy market and profit orientated way to run a private enterprise in a free market driven society.
More something Ceaucescu would be proud of.
Correct?
More something Ceaucescu would be proud of.
You have gotta be kidding. Well, at least you didn’t mention Hitler, who seems to be the perennial favorite in these internet Bad Analogy competitions.
Some of you clearly don’t follow what’s going on. Here’s a metaphor that might help.
Let’s suppose that you have a bridge that’s falling apart — we’ll call it the Brooklyn Bridge. Last autumn, there was a lot of heavy traffic on it and we didn’t have time to remove the traffic in time to prevent death, so The Guv’mint had to toss some money at it to fix it in an emergency.
Now, a few months have passed and the dust has cleared a bit. Now we have to figure out whether to fix the bridge or let it collapse. If it collapses, The Guv’mint gets no money back.
So far, this is what has happened:
-The Bridge’s bondholders have agreed to take cash to go away.
-The Guv’Mint has agreed to turn its loans into ownership of the Brooklyn Bridge.
-The bridge workers, who are owed a lot of money for promises that the former owners didn’t keep, now also own a piece of the Brooklyn Bridge.
Now, who you would you rather be — the guy who gets paid actual cash to not own the Brooklyn Bridge, or would you rather own shares in this bridge?
Americans will get the joke and answer the correctly — owning the Brooklyn Bridge is a fool’s mission. It would be much better to get cash up front than to “own” something that produces no benefit to you.
The union is getting scammed. They are going to own a chunk of something that is effectively worth little or nothing, unless it does very well. Every creditor on the planet will come before it, because equity follows debt. They aren’t getting squat out of this.
Not that they’re doing well from it, but the bondholders are better off than anyone else in this arrangement. At least they’re getting money for their trouble. Why do you think that the government initially offered them equity in the first place?
Robert Farago:
In short form, the Germans came, they saw, they laughed, they lunched, they left. And when they left, they maintained a 19.9 percent share in the hollowed-out American automaker.
Robert, I value your work here very much – but where did you get to that obscure conclusion? Daimler, respectively the Daimler Shareholders, paid billions of Euros in the share swap merger, for a company which was already on the way down. Yes, Daimler may have made its mistakes – but in the end is pored money into a hole, and did not get anything out of it. To write as if Daimler made money out of this merger seems to put this upside down.
@Pch101 :
I think that link right here at TTAC by Edward Niedermeyer:
https://www.thetruthaboutcars.com/gm-bondholders-thanks-but-no-nsfwing-thanks
answers pretty much your little out of the reality loop anal-ogy.
@TireGuy :
April 28th, 2009 at 3:47 pm
I sign your statement – Farago got the Chrysler/Daimler deal exactly on the spot-
exactly upside down
I think that link right here at TTAC by Edward Niedermeyer answers pretty much your little out of the reality loop anal-ogy.
You have it backwards.
Notice what is going on there: They don’t want the equity. They want money, not equity.
If equity is so awesome, then why do the bondholders prefer cold, hard cash?
I dont have it backwards – I think I have it straight.
they (whoever dances in that burlesque) do neither deserve or have to ask for equity nor cash.
Bankruptcy is the only logic and fair ending of this dramolette.
Finito la amore, zilch, basta, hit the road, schluss
Anything else is cheating.
A carmaker who is not able produce cars folks want to buy and making a profit by serving customers does not deserve to stay with governments help on the market. Thats widely unfair to competing entities which are able to stand healthy alone and have to pay in worst case the ultimate price for failure as they are small enough to fail.
Investors who had money in the big 3ths stocks had simply bad luck and lose their investment.
Thats ok.
Thats the way the system works =profit pays – the loser dies – simple and pure.
And healthy.
The last time i checked the US constitution, governments responibility is nowhere in there to be found like taking over and running private mills to save them in case they are suddenly becoming impotent on a broad scale.
Thats perfectly normal for me – especially in a environment where the banks & stock exchange turned from institutions with a real-life financial function to the public good into casinos.
A carmaker who is not able produce cars folks want to buy and making a profit by serving customers does not deserve to stay with governments help on the market.
The issue isn’t with what is “deserved” but in preventing the CDS market from taking the American economy to the cleaners.
This has nothing to do with cars, and everything to do with maintaining the US economy. If that means misleading the union into thinking that they’re getting something out of the deal, that’s how it goes.
The bondholders are vastly better off. They’re being paid more than they would get in Chapter 7. The union is getting a whole lot of nothing. The taxpayer will be lucky to recoup something, but at least the economy didn’t implode in the interim.
@Pch101 :
The taxpayer will be lucky to recoup something,
probably, or most probably not – anyhow –
The taxpayer was not asked and did not approve in a public vote
giving permission to the gomnt to gamble high with his greenback.
Show me the page in the US constitution please.
…<but at least the economy didn’t implode in the interim.
not in the interim. True, not until tonight – just wait a few weeks;
when the today exploding tent cities will reach the WH inner garden area.
There already visible and a stone-throw from the WH fence.
Buying new saddles for dead horses will never make them run…
Better let the fresh breed, the young industries waiting with empty pockets in the wings, to the trunk
The issue isn’t with what is “deserved” but in preventing the CDS market from taking the American economy to the cleaners.
Said Cheaucescu and nationalized besides all private entities also the french owned Renault factories including all private sub-supplier and parts producer back then and turned them into state run (Dacia – comparable to the by then Trabant, Skoda & Lada no bad car) mills.
He took the former enormous rich Romanian state to the sewer fast – so watch out.
“[Side note: why does the MSM constantly predict sales and financial results and then report that the actual result was greater/smaller than predicted as if that’s big news? Can’t they let the companies manage expectations on their own?]”
Because it is news, if you are thinking of buying or selling shares in the company. The predictions of the future financial results are baked into a rational buyer’s valuation of the net current value of each share, so if the company does not hit its guidance figures the share price will be affected, in a rational market.
So it is news, it just isn’t very interesting to most people.
Greg Locock
Ah. Curiosity satisfied. Text removed.