What if Cerberus isn’t selling Chrysler but buying GM?

General Motors has very little free capital for an automaker.

It is a difficult time for the Big Three, who have pandered to Americans for years, building the big, gas-guzzling vehicles preferred by the United States and, to a somewhat lesser degree, Canada. General Motors did try, producing the credible Cobalt and Saturns, but Americans didn’t respond; our collective consciousness declared that Americans don’t make good small cars. The Neon may have been our salvation back in 1993, but odd cost cuts clobbered the little car’s reputation and it didn’t do much in the long run for the Americans makers’ reputation. 

This is the long way, in case you were wondering, of saying that General Motors, like Ford and Chrysler, is in dire need of small cars. They make some great small cars in Europe and Asia which will no doubt make their way here - but that takes money, lots of it, for retooling factories and converting to American needs and desires.

Cerberus has money.

Cerberus has lots of money, a massive supply, and more where that came from. Some people may be wondering where their next mortgage payment will come from, but lots of people have more money than they know what to do with, and they’re not about to invest it in mere stocks. Cerberus can take their billions and put them to better use. 

Thus it was recently suggested to me that, while the public story will remain that General Motors is buying Chrysler, the reality may well be that Cerberus is taking control of GM. 

The question then is what to expect. Wagoner would probably be pushed out, either immediately or via a Daimler-like delayed reaction. Nardelli would likely be pushed to the top, though he might not be especially happy about the added responsibility. Bob Lutz is a big question mark; he’s a huge talent with a correspondingly huge ego, and he may not want to work with the other Bob. Then there are Tom and Jim to deal with; hopefully Tom LaSorda will remain at the helm, continuing to defend and demand investments in production infrastructure and intelligent use of manufacturing employees. 

We do not know what the future holds; few people outside those polished-wood boardrooms do, and I suspect many of those within the rooms are getting the wrong idea, as well. I do believe that most analysts and columnists are as wrong as they were when they praised Daimler’s “merger of equals,” and that large chunks of Chrysler will indeed survive. Even GM’s huge brand portfolio might squeeze through if they have the discipline to figure out what vehicles will do best in what niches and have just one “all things to all people” brand in Chevrolet, the new Plymouth. Perhaps the Chrysler and Pontiac brands will disappear and Buick will get the former Chryslers while Dodge gets the former Pontiacs. Perhaps the commercial Dodge Rams will become GMCs. Or maybe they really will shut the whole thing down and try to make ‘em all from kits banged together in India and China. We’ll find out. 

But it’s probably not as simple as we’ve been hearing.