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.
It could be a interesting possibility to see Cerberus buying GM. One thing who worry me is Nardelli as the possible CEO/president or chairman of GM if Wagonner is forced to quit when you remember more of Nardelli tenure at Home Depot instead of General Electric. If Nardelli go to GM if he should stay only as chairman (acting like Bill Ford jr since he left his post of CEO to Alan Mullaly) while Lutz, Lasorda and Press do most of the decisions. But I’m only dreaming about this.
Many of the reports I see are that Wagoner wants the merger but the GM board is tentative about it. If that’s true then I don’t think Wagoner is going anywhere after any kind of GM/Chrysler merger. No one would push for a merger that puts them out of a job if they can help it.
Either way, with all the stories about chrysler being sold and what not Cerberus now has to do something. Whether it be a stronger alliance with renault, a sale to renault/gm or whatever. No one is going to buy a chrysler vehicle right now with all the questions out there, what good is a lifetime warranty if the company is gone in 3 weeks? Cerberus won’t make any money with chrysler now so they either need to buy someone or sell to someone to get the vehicles off the lots.
If only if only Iacocca and Kirkorian had taken Chrysler priavte in 1995. We wouldn’t have been raped by Daimler, lied to by Cereberus, and being “merged” with GM.
Where is Lee when you need him the most?
I do now feel vindicated. I was called a “fool” the other day for espousing the same premise. When you control the money, you control. It doesn’t matter what entity it is. Cerberus has money, tons of it, always had, and always will. No doubt, they have been accumulating lots and lots of money even during the poor economic conditions we are experiencing. That is what they do. Exceptionally well as it appears. You don’t see them running to the exits in the money end of things. And Cerberus, as we very openly discussed when their purchase of Chrysler first came up, have continued to discuss it, and are now looking right at it, is ALL about the money. Deep down, I can only speculate that this whole issue was not brought on by GM. GMAC is 51% controlled by Cerberus. They might be looking for a means to exit Chrysler, BUT, retain control of the money. What better way to do that than to purchase GM, and then leave the car business to the combined chaos that would ensue.
Well I for one am not happy about this at all. Chrysler merging with any one is a bad idea. True, the big three got themselves into this mess by giving away the car market to the Japanese. It makes me sick to my stomach that Chryslers taking this kind of beating even with all the cutting Cerebus has done and it still wasn’t enough. It would be one thing if Chrysler was not making good products but thats not true. They make great stuff and the Challenger and the Ram truck are positive proof of that. For some reason a magazine that test toasters one issue then toilet seats the next can command so many people to believe only Toyota can build cars and trucks is beyond me. Good old fickle Americans. If gas were to all of a sudden to cost 2.50 a gallon, you better believe suv’s and trucks would once again start flying off the lots. Personally I think that Toyata builds the biggest fleet of butt ugly vehicles I’ve ever seen. But a fleet manager once told me that in the car business, “there’s an ass for every seat”.
Mike,
I can’t argue with you, though I WILL say that in the 1990s, Chrysler was fighting back – hard – in the car market, and not just with big cars. They had a subcompact ready and waiting but that was killed by Daimler.
As for gas prices, they ARE already pretty low, in constant dollars – below $3 in 2008 dollars.
I can see Curtis being right. Cerberus exiting the Chrysler business doesn’t mean they’d totally get out – GMAC’s a money business and something they understand on a gut level. I also don’t think this would automatically mean the “end” of most or all things Chrysler. Some, obviously. But should this happen the resultant company would (I would think) cherry pick the strongest aspects of the two.
We should be careful what we wish for at this time because if Cerberus is really looking to exit the business of building cars then they will – if not with GM then with someone else, or a few someone else’s. They could buy the rest of GMAC without selling the car operations to GM, no? And then split up the pieces among several buyers who would, say, love Jeep but not necessarily the Chrysler brand?
Whichever, we’re in full on silly-season mode, with a lot of stuff flying around, so I’d advise everyone keep a foot on the ground when reading anything (ANYthing) relating to this, because right now it’s way too easy to get carried away.
Strongest aspects if a matter of taste. Some would have said in the 1990s that Chrysler’s strength was in small cars (the Neon was the most profitable small car at the time AFAIK); but Daimler saw it as a truckmaker.
I have said for ages that Chrysler would never recover from the “merger of equals”. Lets hope that Cerberus does buy GM. I think that would be better for thousands of American jobs if it where the other way around. Cerberus could very well buy GM when there stock is at an all time low. But in the long run we have no one to blame on this mess with Chrysler but Daimler!
You seem to be right. I personally would prefer, at this point, for a foreign company to buy Chrysler. I know that sounds paradoxical and even unpatriotic, but if GM buys Chrysler or vice versa we’re looking at over 40,000 jobs lost, and if, say, Mitsubishi or Renault bought into Chrysler, probably it could remain “as is” since there’s so little overlap!
As I read all of this merger talk it seems to me that the root cause of the auto industry’s woes are that the vast majority of Americans will do whatever it takes to avoid buying American made products. A pity really, because American companies do make some first rate products. I do agree, however, that the Big Three have consistantly given market segment after market segment to the foreigners, primarilly the Germans and Japanese. And one only has to look at some of the products from BMW and Mercedes to see that they have, quite effectively, stolen the chapter from the Americans on how to create a proper muscle car. Where are we in all this except retreating to the segment of full-size pickup trucks because the managements of the Big Three are convinced that we can no longer compete. An example, Chrysler decided to discontinue the Pacifica just when many other marques are getting into the luxury crossover segment.
But enough of that. My feeling is that if Cerberus were looking to get out of the car business and foist Chrysler upon, they should be talking to Nissan. Nissan has a great lineup of small entry level and mid-size cars which Chrysler lacks thanks to the Benz rape. Nissan also has a truck (Titan) and a large SUV (Armada) which they cannot give away. Nissan also has Infiniti which is probably the poorest selling of all the luxury brands. I know that I am dreaming about this but if I were managing a Nissan-Chrysler amalgamation, I would leave the Nissan line essentially intact except that the Pathfinder, Armada, Frontier and Titan would become Dodge vehicles – Dodge would become a truck and SUV maker. Infiniti would be rebranded as Chrysler, keeping the 300 and bringing back the Pacifica (the styling and capabilities of this vehicle are infinitly better than that ugly lump they call Murano). As for Jeep, keep Patriot drop Compass (the Patriot looks like a Jeep). Bring back the Commander (again this looks like a Jeep) and rebrand the Grand Cherokee as a Chrysler. Also, bring back the Dodge Magnum with a raised suspension and roof powered by the 4.0 V-6 in all-wheel drive only. It should be styled as a Jeep and called Wagoneer and would be a direct competitor of the Subaru Outback.
By the way, I own a 2003 Chrysler Sebring LXi sedan with a 2.7 V-6 and 85,600 miles on it. I was told by everyone (including a Chrysler dealer) that this car would not even last 30,000 miles. It still looks and runs almost like new. I have been thinking about upgrading to a Jeep Grand Cherokee but, like everyone else, I an wondering whether the company will still be around after the first six months payments.
Wes
I drive a 2000 Intrepid with a 2.7, just turned 153,000 miles. It’s a great motor. Much better than the 3.5 in the new Impalas.
There are plenty of LH’s out there with a lot of miles, and plenty of minivans and Dodge trucks. Wish they would do some ads of high mileage cars, like Toyota did a few years back. Chrysler makes great cars, but they have a lousy reputation with the public–something Cerberus has done little to improve.
I have offered to contact people on the 200,000 mile club list. No takers.
Truthfully, I’m still trying to wrap my head around why GM would want to do this. According to some reports some folks there are wondering as well. As enticing as that 11 billion would be, shouldn’t GM be trying to get smaller, not bigger? They still have too much overlap. I’m just not seeing how the plusses outweigh the negatives for them.
Now is the time for all good men to come to the aid of their country. Yes country. What happened to “government of the people, by the people, for the people, shall not perish from the earth.”
(-Abraham Lincoln, Gettysburg Address)?
Where is our government in this? Here we have Cerberus using Chrysler as a pawn in order to gain control of GMAC and reap millions in government funds in the continuing bail-out season. Doesn’t anyone see the wrong in this? Are there no laws to protect the “government of, by and for the people?” and if not, why not? Maybe the candidates should be asked that question?
Yes, now would be a great time for people of wealth to invest in the future of our country. The long term future, not the next two years then take your money and run future.
There is nothing in the GM/Chrysler deal that is good for the country. Unless another forty thousand un-employed is good. Unless further erosion of our industrial base is good. Unless an economy based solely on non-revenue producing service jobs is good. Unless being totally dependent on foreign companies and their governments for our very livelihoods is good. Maybe we should just invite the new owners of the United States to come in and claim a state or two.
Right now, today, Chrysler is probably better-off than GM for the next three to five years. There are new products and technologies ready to emerge and spur Chrysler forward in a revitalized American automobile industry IF the government allows it to happen. Hell, the government, supposedly us, should be enticing, nay, mandating, it to happen. Are we to follow England’s lead and toss off our whole automotive industry as lots to the highest foreign bidders? Is the “Big Three” to become the “Big Two” which will inevitably become the “Big One” and then, what, the new Big Three of Toyota, Honda and BMW?
There are opportunities here for the moneyed to support the very system that allowed their fortunes to be amassed. Chrysler could be purchased from the short-sighted, I-want-it-now clenches of Cerberus. Sterling Truck could be added to the portfolio to create a new, strong automobile and truck producer whose energy would be felt world wide within the next five years. Yes, the product line must be renewed and improved, but Chrysler is at least fifty percent of the way there already, ahead of Ford and GM. Alas, I fear that the spirit that made a new way of government work, the won two world wars, that once set a standard of living envied the world over, is dead. I am as ashamed of the legacy being left for our grandchildren as I once was proud of the legacy left us by our grandparents.
I fully agree, and I will add that the ONLY way to stop this is to CALL YOUR LEGISLATORS – NOW. All three of them – two Senators and one Congressman. I don’t care what party you’re in; this is a direct “wealth redistribution scheme,” welfare for the richest people in the country while tens of thousands of “Joe Sixpacks” (to use that popular but rather condescending term) are thrown out of work.
I would like to extend my heart felt “THANK YOU” to Mr. Hagan. The points he draws out about the state of our government has a certain lamentable sadness in its accuracy of the current conditions. There seems to be no “damnability” in being caught in ethical violations. No shameability in breaking laws. No real interest in seeing government really work like it was intended to work. As I sit here now, I listen to one of the real instigators of the current economic meltdown, currently in Congress, who has so far, not even been looked at, berating “rich” people and stating that he is “certain” that he can recover a lot of money through taxes in the future. Isn’t that sweet. This is the “best” idea? Let us really destroy the Untied States. Which smacks of the same old garbage that got us here to begin with! And we “the people” keep on electing individuals like him, expecting change. Isn’t the definition of “crazy” involve doing the same thing, over and over, expecting a different result. No longer about “Country” just about political positioning. Another Congressman that easily calls his own constituents “racists” and now “rednecks.” And they continue to allow him to serve, when in actuality, his insolence should be rewarded with a private party involving warm tar and feathers.
MONEY MONEY MONEY MONEY MONEY MONEY MONEY MONEY and MO’ MONEY. THAT, is what it is all about. I agree about contacting your legislators. However, I can tell you all from experience, while phone calls and emails get some attention for a day, the true means to rattle the cages are written communications. LETTERS. Can’t be sent away like email that disappears with a single touch of a button. How many times have I gotten a response to emails to Senators and Congressmen….. “deleted without being read.” Phone calls bother secretarial staff and minor aides for a time. But LETTERS can’t be sent down an electronic tube nor ignored like a phone call. Even if they don’t open them, they do not go away without having to destroy them.
Chrysler lost its way under Iaccoca. I know everyone hails him as some sort of hero. He was not. He only came to Chrysler to salve his own ego, and stick his finger in the eye of the guy who fired him the first time. Remember, he got fired again from the Statute of Liberty restoration project. He obtained the government guarantee, yes. However, the great many things he took hero worship like credit for, were already in place at Chrysler. Like the “K” cars. Like the mini van. He nearly sent Chrysler down again with his failure to re-constitute the products being built, with constant re-runs of the “K” car which sold well, but near reached the levels he said it would. He loved gimmicks, but had no real plans for new cars, sticking the “K” with 14 versions of hub caps, 25 versions of vinyl roofs, padded or not, and other such things that had no redeeming value in engineering. Had it not been for the acquisition of AMC, and their engineering staffs, the LH series would have NEVER seen the light of day. Iaccoca rejected the original proposition out of hand. It had a chance if Mr. Lutz were left to lead it.
There is a sense within the national and even state legislative bodies that ONLY MONEY MATTERS. For YEARS, the tax payers have just been ignored, put upon, discriminated against, lied to, stolen from, denied access, and legislated out of being able to control people they elect. Year after year, voting not for the people, but for the money. Jobs going overseas where the same work here gets $25 an hour, to a back water of the world that gets slave like labor for .25 a day. Because no one is calling these companies out. No one holding them to the fire. And the ones that do are shouted down as “anti American.” It is perplexing and stressing to look at Congress and wonder just where they are going. Where is the “God, Country, Home, Mom, Apple Pie” that greeted Americans that did win two wars, seeing victory in 1945. I don’t see any of that anymore. I look up and down my street. Solid middle class. 963 homes in the sub-division. On September 12, 2001, you could count on one hand the number of homes that did not have some symbol of America displayed on them! Most were our Countries Flag. Today, I am the only one on the street that continues to have the flag proudly waving on my house. Unfortunately, I can count on one hand the amount of houses that follow my lead. What happened? Somehow, being proud to be living in what is sadly becoming what used to be the greatest country in history on this planet is somewhat embarrassing to profess or show outward display of your pride.
I was rooting for the failure of the “bail out” plan. Surely, there are greater minds, and far more concepts available to the biggest powerhouse of wealth than this sorry stealing of the tax payers future. The worst thing is that NO ONE knows if it will EVEN WORK. This isn’t leadership. It just smacks to me, of being contrived and engineered and manipulated. All leading to this horrifying concept of a “one world order.” Got to destroy or render ineffective the United States either economically or militarily, and right now, the manipulators of this singular world system seem poised to make both happen.
In as much as companies, banks, and other entities continue to combine, leading to one HUGE entity, is it not surprising that in the economic climate today, we see GM trying to (if that is truly what is going on) make a desperate move to grab the cash cow, Chrysler. Just as Daimler did in 1998. This time, it will be the end of Chrysler. GM is not going to use the Chrysler bank account to do much of anything except try to save itself. There may be some nods towards items that GM could make fit, but no reason to further Chrysler in any way. Is this good for America? Is the loss of many, many, many small business good for America? Did the coming of your local Wal-Mart promote your local community, or drive out the small business, and then turn around and bring all that Chinese junk for you to dutifully buy, and like it? I don’t shop at Wal-Mart. I used to, when it supported America. I don’t now that it exploits America. Perhaps if more people took a stand, and stopped shopping there, things would turn around.
As well, I still drive a Chrysler. And I can tell you, we all love it. My T & C gets good mileage, has been absolutely trouble free for nearly 30K miles, and the encyclopedia picture of reliability. Buy American? HELL YES!
I look at my 6 year old Grandson, the delight of my life, and wonder, what, WHAT is going to be here for you in just a few short years. When I come from an era where Dad worked, Mom stayed home, kids followed the rules, government did not seek to exert control over every single aspect of your life. There were Plymouths, Fords and Chevrolets, and they were the ENVY of the world. It is a huge bowl of “not good” that it is no more. Where today, compliance with laws, means “not getting caught” rather than pride in self in doing what is right, when no one is there to know except yourself.
Hard to argue with you (as usual). You’re right. And I’ll add — if you DO oppose this merger, you have to call all three reps and LET THEM KNOW. They ignore everything but phone calls. If enough people call, a few strong senators and congressmen who have some residual feelings about this nation might just put pressure on the Fed and Treasury to BLOCK this deal.
Interesting to see that GM was a bidder on Chrysler the first time around; that’s the first I heard of this.
Apparently GM’s execs are split on this one, too.
If Cerberus wasn’t after the huge payoff, and if they were willing to leave Chrysler with a small profit or at least breakeven instead of wanting $100 billion of post-bailout-GMAC, I wonder if we could get some other wealthy group or person to come in. Magna might still have enough cash; they were interested the first time. Verizon has been searching for a good way to spent its massive profits. ExxonMobil could use its pocket change. This is Bill Gates’ big opportunity to do something for someone else without his wife pushing him into it. Kerkorian’s pulling out of Ford but I suspect he needs his money for something else… and maybe the Japanese companies that keep Mitsubishi alive could find a little extra cash to assure its long term profitability by linking it up with Chrysler to make it one of the big boys!
Regardless, a taxpayer funded GM-Chrysler hookup would do more to destroy this country’s economy than the $700 billion giveaway (put on top of $149 billion in tax cuts and with NO cuts to our profligate national spending). Call your reps NOW and spread the word.
I agree with your points. We need to put our country and workers first. These politicians and CEO’s feel safe because they can fly to France or a compound in Uruguay, with their offshore accounts intact, if the US or Canada goes south. They feel the dummies that work and pay taxes will be left holding the bag. But they shouldn’t count on that too much. Ceaucescu thought he could escape too.
I’m interested in hearing more about Iacocca and the LH. On the cab forward section of allpar.com
(http://www.allpar.com/corporate/cab-forward.html) there is the following:
“The Portofino had the proportions and the look of the Intrepid and we were well along with a model of it. Lee took one look at it and asked, ‘Why can’t we build a production car like this?”‘
Did Iacocca drag his feet on the LH? I have read elsewhere it was his mindset to think that putting vinyl roofs and wire wheel covers was the way to dress up a vehicle for more sales. I suppose that had worked for him several times in the past (i.e. Granada success in 75). I would agree that mentality probably cost Chrysler a bit in the 80’s when Acura was coming out, Lexus was waiting in the wings and Chrysler persisted with dolled up K-cars. I think he knew winners when he saw them, so I would be be surprised if he did go against the LH.
I do believe Iacocca appreciated the dire straits of the company when he came in 78. I think he appreciated the need for sacrifice to get the place back on track, rather than saying, hey, let’s sell out, gimme my $100 million parachute. I do fault him for choosing Eaton as his successor and not fighting the Daimler deal–don’t recall seeing him on TV calling on Congress not to allow it.
I do not wish to fall off the thoughts set by the original commentary. Suffice to say that Iacocca hauled Mr. Lutz into the head office in 1990 and DEMANDED that Mr. Lutz immediately, and some say preemptively, FIRE Mr. Castaing. This time frame was just about 1/2 way through the platform design teams mission of the LH series (pundits say Last Hope) of Chrysler cars. King Lee had a long memory. He had been burned by his own engineering team of young guns back in 1988. They overwhelmingly loved Castaing. Long story that would need far more development than should be made here. The actual and original concept and design of the LH began with Harold Sperlich (who toyed with it in ‘73), fired by Henry Ford in Dec ‘76, and hired by Chrysler in March ‘77. Sperlich was Ford’s product planner, and more largely responsible for a huge string of hits than is given him credit.
Of particular thought is the reference made to Ceausescu. A remarkable character, but in finality, the people had to take matters in their own hands.
IF, and I am only saying IF our economy falls into the sort of depression that it had in the 1930s, what do you suppose would happen? I say immediate Martial Law would be imposed. The current law allows the Director of Homeland Security to issue the decree, IIRC, with no oversight or report to Congress or the President. It immediately Federalizes the State Guard Units, passing local control away from state Governors into the hands of the President. Could it happen here? Well, I am not certain. But why have such a latching mechanism in place if the government is so concerned with it’s citizens.
Perhaps the total collapse of the automotive industry as we know it, beginning with the acquisition of Chrysler, then its total disbandment, which would not save it’s master, GM, who cannot find friends or financing to continue, thereby throwing thousands out into the grips of unemployment would be such a reason.
OK… we need more of the story… where’s it come from?
Thanks for the additional info. It is fascinating.
I don’t know where all this leads. We seem to be creeping into socialism. Even a supposedly “conservative” President is nationalizing entire segments of our society. Paulson handed one page documents to banks TELLING them they are selling their stock to the US government. That is not freedom. Where does the constitution provide that kind of rule by decree? I don’t think we will become the Soviet Union by any means, but we do risk becoming MUCH less free–economically and politically.
We now have an oligarchy. It does not represent the people of America–most of the people invovled beleive they are beyond national identity or loyalty to any state. I don’t think the people are capable of taking the country back from such “leaders.” We have entire generations that expect the government to provide everything for them, to take away all risk, to make everything equal and fair and nice, and if things don’t turn out right, well that’s okay, uncle sam will give them a check.
THey won’t stand up and question what’s going on–they’re fat, dumb, and happy, they’ve got porn and they’ll have free health care. When they feel the pinch, as many are now, a diet version of Fidel Castro seems attractive, especially the sock it to the rich mentality–little do they know the dark shadow that lurks around the corner. We will lurch a little further toward that lite bread version of Castro-ism or Chavez-ism. But then in four years if we elect a diet cola “Conservative,” we’ll lurch a bit in the other direction, yet the same oligarchy will run things. Chrysler will disappear, so will GM. Goldman sachs will make a little off the deal. Maybe Toyota will be allowed to buy Ford. Goldman sachs will make some more money. Some more banks will get bailed out. The airlines will get bailed out–Goldman sachs will make more money. We’ll be told that’s the free market and it had to be done, it’s for our own good. There will be job programs and unemployment benefits to replace the $20 on hour jobs with $8 an hour ones. GW will move to Uruguay, Paulson will move to France. New leaders will have their snouts in the trough for their turn to steal from the American people. The middle class will grow smaller, a handfull of robber barons will grow richer, and we will be more like Mexico, with a large class of poor more easily manipulated by politicians promising more benefits.
I wish we had a Harry Truman or even a Vladimir Putin!
[...] What if Cerberus isn’t selling Chrysler but buying GM? [...]
Chrysler cannot stand alone, despite the wistful wishes of its supporters here. It needs a union with a larger automotive enterprise. I myself think Ford is a better merger answer than GM; but if GM is it, or vice versa, Cerberus takes over GM, so much better than eventual Chapter seven for Chrysler.
Ford would be a better fit with less overlap. Ford has rather poor US autos, and good overseas designs and a larger foreign presence. Its brands are few and a mess. Chrysler together would increase the Ford market-share in NA to GM’s size. A merger could provide an answer for Ford brand problems; i.e What to do with Mercury (kill it!) and replace it with the cherry-picked best of Chrysler products. There is a lot less brand overlap. But such is not to be. So despite the pain, this merger is beneficial, even with GM.
As I said elsewhere, a GM/Chrysler merger can only occur in “bad times”. Otherwise the government anti-trust people would never allow it.
Are we in “bad times”?
I think the looting of Fannie Mae and Freddie Mac and Lehman Brothers by Democrat political appointees, Raines, Johnson and Gorelik, turned self-appointed “Wall-street” types, has precipitated a definite financial liquidity problem. But that is manageable, and mostly transparent, to the real economy. Mr. Bush and his Mr. Paulson are steadfast in defusing this liquidity crisis time-bomb, before real world economic problems transfer to and occur on Main Street, unlike the Thirties. Unusually, they have by-passed the expected political finger-pointing, and silently accepted the looting by Obama associates with little comment. The time-bomb liquidity trigger has been disarmed, I think. Even at the cost of electing Obama and the Democrat looters, he protects, due to their campaign contributions.
No, this slowdown, (its not yet a recession, in the classical definition), was precipitated by the enormous “tax-increase” equivalent, produced by the OPEC oil price rises. That hit people in the pocket as they found it difficult to spare disposable income for necessary auto fuel to get to work. It is also talked up by one of the political parties, seeking to win an election, naturally.
But OPEC is retreating even now, Oil Prices are falling precipitously. Iraqi oil production is coming back on line, and the supply problems are abating, as the world economy slows, and world oil demand along with it. The financial problem is going away too, even as we speak. Unlike in the
Thirties when liquidity was allowed to dry up, and money supplies actually fell, precipitating a world-wide Depression. Mr. Bush will get no credit, but it is a job well done, nevertheless.
So this may turn out to be the twentieth prediction of a recession by the Stock market in the last three actual recessions.
In short, this may simply be some dark cloud “mirage” passing over with little actual “sturm und drang” happening. The disappearance of Global Warming for the past decade, is undermining the only other, possibly man-made, economic disaster able to befall us. The developed countries will be increasingly reluctant to listen to the idiotic Chicken Littles, and shoot themselves in the foot, for a largely Chimera nonsense. In addition, the Nuclear Renaissance is going to provide lots of cheap electricity to power those coming electrified autos, and these new safer, electric generation plants will be coming on-line at approximately the ideal time, in the mid-late teens.
This activity, like the US ABC battery project that gave us Li-Ion auto batteries, and the re-creation of ITER fusion research, are Mr. Bush’s silent contributions and largely unheralded.
But electric cars are coming because of the LI-Ion research he sponsored for a decade at the USABC, he sponsored. And the GEN III+ safer, “melt-down” proof, Nuclear generation plants were forced to be perfected by his NRC. Even as he fought for and reformed the construction laws to prevent interference and delay by legal green-wacko stalling. That stalling also bankrupted virtually any large investment in our electric infra-structure for two decades, so the US would have been unable to power the coming electric cars with ample supplies of clean electricity.
Now a true substitute for Oil in the last great oil market, Transportation, is finally appearing after 35 years. This Oil recession, may be the last of the OPEC induced world recessions. Conversion to electrified autos, now gathering steam, will drastically reduce oil demand, by as much as 80%, and lots of other supply problems disappear too. That will enormously reduce the power and influence of OPEC. Political extortion and terrorism will probably abate as well.
But does Ford have the cash to do it? VW and Fiat would be better partners than GM, maybe GAZ of Russia would be better, but they do not seem to be interested.
I think the big investors have decided the US has too much capacity and they want to get North America down to one indigenous manunfacturer, and they’ve decided they can make alot of money off the deal. It’s a continuation of the mentality that has prevailed since the 90’s–that companies should be stripped out to boost stock prices, leaned out to boost profits, and sold out when they no longer are able to survive on their own. Short term profit over long term viability. There’s probably no turning back because the government and financial elites all think the same groupthink, and so far Congress is rubber stamping everything Paulson does.
If these CEO’s were running Chrysler in the 50’s and 60’s and 80’s they would have wanted to sell the company then too. Remember how Chrysler lost the #2 sales position in the early 50’s? how the car lines got long in the tooth and they required a huge investment for new models (turned out to be $100 million in 1955 dollars)? or same thing in the early 60’s, with leadership scandals, the 62 models bombed. Or think about Iaccoca taking over in 78–reputation for quality was lousy, the K-cars were still two years away, the foreign competition was fierce. It was just unthinkable in any of those periods to give away the company–it would have been seen as robbery.
I’m not sure Paulson and Bush are heroes on the bailout. Maybe I’m wrong, maybe it had to be done to prevent the whole system locking up. To me it represents welfare for the robber barons, nationalization on the scale that would make the 1950’s Labour party in Britain envious.
I hope you’re right about the power industry and such. There are certainly opportunities for the US to become a leader in nuclear power, electric cars and other high tech fields.
From someone whose family has been driving Chrysler products only for 60 years, (And that’s a trouble free 60 years mind you), I would be truly saddened to see my car company finally destroyed by execs who have no passion for cars, and obviouly no business skills. One thing is for sure, I will NEVER buy anything that is remotely related to General Motors. I don’t care if GM is an American company, and I am a very loyal patriotic American, I will NEVER EVER, EVER, EVER buy a GM product. I will just stop buying new cars for a few years, and will buy used Chryslers. So go ahead Cerberus, destroy a wonderful company. Just know that you ruined a lot of lives in the process, and that you suck. I guess any company who would employ Dan Quayle could only be expected to do something as stupid as this. Sleep well you bunch of frikken morons.
I agree with some of the earlier posts. I think Chrysler can do better with it’s image if they use some of the customers that have gotten high milage out of their vehicles as a testimony that the company does make great cars. I have a 1997 Sebring coupe LXI with over 250,00 miles and the engine still runs great. Yeah, the engine was made by mitsubishi but, who’s gonna tell.. Lol… It still has a chrysler name, so in my book, chrysler gets the credit.