Why does Chrysler need to be sold by November 4?
Here is my theory: the goal is not to sell Chrysler by November 4.
It is to sell Chrysler on November 4.
First, let’s describe the paranoid version of this deal:
General Motors will, under duress (including Cerberus’ abuse of GMAC to deny loans to most GM buyers) trade its share in GMAC and some stock for America’s former #2 automaker; most expect 40,000 layoffs to be made almost immediately, with 100,000 lost jobs when the dust has settled (including suppliers). Wal-Mart and McDonald’s can’t absorb that many people in a single year.
The idea is to take extra capacity out of the American market. That is, domestic-company capacity. Foreign companies are building North American capacity. Don’t expect shutting down a few GM and Chrysler plants to be a long term fix.
Many expect this deal to be subsidized by tax dollars: either GMAC will be handed over to Cerberus and then “bailed out” by the American government, or the Fed or Treasury will make a big loan to GM to allow it to buy Chrysler, or both.
Very, very few people like this scenario. It involves Cerberus getting its usual massive profits and everyone else getting something entirely different.
If you were going to do something like this, when would you do it? On an ordinary news day? Or, perhaps, on the day of one of the most highly contentious elections in our nation’s history?
Months of mud-slinging and lies have led us to this election. People care. Hundreds of thousands of people (perhaps millions) registered to vote in this election, who have ignored other elections. They care. They love or hate Obama and McCain and will be focusing on the results.
Even if the voters had time for GM and Chrysler and their taxpayer dollars being channelled into billionaires’ pockets, the news media would not cover it. They have no time for anything but minute-by-minute sounds bites, analyses, and statistics. Election night coverage has time for one thing: the election. There is no time on election night for substance; it’s all about who wins, who loses, and public-relations or self-serving commentary about why one candidate or the other is leading.
In short, according to this scenario, the taxpayer-subsidized sale of GM to Chrysler is too odious to have on a night when people might notice.
Now, here’s the “Allpar exclusive” rationale… not that I’ve read any explanation similar to the “busy news day” theory anywhere else.
There are people who have told us that GM is not really buying Chrysler so much as Cerberus is buying GM. That is, there will be a GM takeover of Chrysler as far as the public is concerned, but the money men pulling the strings will control it, and the Chrysler crew will have the balance of power.
In that scenario, Bob Nardelli would end up on top or #2 under a figurehead. (If he ends up with the combined company at all, it’s almost proof that GM isn’t really buying Chrysler. Regardless of what he’s done in the past year, his reputation from Home Depot is hard to shake.) That would allow Cerberus to do anything they wanted to Chrysler, including dropping the Chrysler name, which I personally see as inevitable now. That’s why this scenario would be spun as a GM buyout: otherwise, there would be a reaction among employees and enthusiasts to, say, Chrysler brand being dropped, the 300C going away, various factories and traditional mainstays shutting down (Jeep Liberty, I’m looking at you.) Or the Daimler plan to make Dodge the truck/muscle brand and Chrysler the car/minivan brand (which I still find absurd).
Again, the less analysis of this deal, the better, as far as Cerberus is concerned. Hence, November 4 as the perfect day to finish the deal. The news cycle would be overload with minute-by-minute rehashing of unimportant details and moment by moment coverage of the horse race.
Frankly, no matter what deal is made, I can see Cerberus wanting to have it on the busiest news day of the year (barring a major terrorist strike, which I don’t think they can predict accurately. Oops, I shouldn’t have put that idea into anyone’s head.) If they do an equity trade with Nissan and Renault (my favorite scenario, as it would impact American jobs the least), some would probably object. Even if they didn’t object, Cerberus loves its privacy and avoids the public spotlight. Even if they were making a really good deal for all Americans, which for all we know they are, they’d probably want less said about it. Especially given the media’s recent remarks about Chrysler and GM in general.
So my theory about the November 4 deadline is that it is about the presidential race, just not the way most analysts have claimed — it’s about using the presidential race as a way to limit the number of articles, column inches, and, most importantly, people paying attention, as Chrysler enters another phase of its (non)existence.
Dave, there you go again. Just doing all that thinking outside the box. Aren’t you going to miss Chrysler when it is gone…..
The picture of the Auburn Hills HQ building all lit up with the “next 100 years” made me grimace with its irony.
So there you are, deciding the fate of the country with your vote, and timed perfectly, the fate of Chrysler has already been elected…… both on the same day.
You just have to sit back and marvel at the utter gall of it all. It fits. The bad news about Lehman Brothers? Released AFTER the market closed on a FRIDAY evening. The bad news about AIG? Released AFTER the market closed on a FRIDAY. We could point to more, but that would be redundant. So, in what Dave is advancing, the election day scenario, in light of Cerberus own statement about or around election day, is perfect. Just exquisite. It STINKS. But, it sure fits right in with the rest of sludge we are seeing.
Don’t you wish you could just fire the bastards? Send ‘em packing. Lock the building. Post armed security. Change the locks. I sure do. And while I am thinking about it, I would like to do the same for the entire Congress. And the White House too. And I might even want to consider the Supreme Court because they haven’t been judging too much in the people’s regard lately…. Would it be so bad?
The death of Chrysler may…… just may, start an avalanche of proportions that cannot be measured. Given what we know, with Chrysler put to an unmerciful death, because it can’t be done quickly, GM is going to be weakened in the same context. It might stagger around for a time, but, if the government, a different one, elected 11/04/2008, does NOT come riding to the rescue with BILLIONS more of tax payer cash….. it is DOOM for GM. 60,000 people jobless from Chrysler. 190.000 jobless from GM. Now THAT is and would be IMMEDIATE. The ripple effect, suppliers, tire companies, aftermarket parts, and others specialized automotive interests could easily top off at 500,000 jobs……. BANG! RIGHT NOW. And that effect would ripple into other areas, such as what we have already seen. Restaurants. Groceries. Gasoline independents. With MORE unemployment. Beyond recession folks. Full blown DEPRESSION.
The picture is quite clear. And yet, our talking heads ignore it, Congress acts like there is no bigger problem than getting re-elected, AND spending MORE of your tax dollars, and the White House, ala Nero, fiddles as the country’s economy burns to the ground. Oh wait. I forgot. He is too busy to fiddle. He is rushing around signing “bail out bills” that stuff his cronies pockets flush with your tax dollars. While the most important industry that has decent paying jobs, good benefits, great products, is left to whither. Places like ALLPAR have been trying to act……… but no one listens. The “media” is focused upon the daily sound byte, with hours of analysis about a phrase, a notion, a speculation, some idiot poll number, and not one of them, NOT ONE, is worth a hill of dried bean hulls because they are not reporting NEWS, only spinning their VIEWS.
So what better time to conduct the killing. Disguise a murder. Commit a homicide. Easily done with everyone focused on the “big” picture of the day, the Presidential election. Great point Dave. My congratulations for your in depth analysis of the crime.
Can this proposed merger really be intended to be some designed ruin of what remains of the US Auto Makers and the American Middle Class. Mopar flows in my veins. Will I need a transfusion Nov 4th ? I am so damn confused. Cerberus just several months back gave a rally cry of confidence to its intentions for the future of its Baby. They are as we speak so I have read investing much treasure in New 09 Ram line, Challenger line, Hybrid Electric’s. Your telling me the Baby will be tossed out with the bath water ? I own GM stock, bought at what I feel is a real bargain. I cant get my mind around a world without GM or Chrysler. If Cerberus would go public, I would purchase stock there also but they want total controll without stock holders to answer too. That really worried me about them when they purchased Chrysler. I still remember the reasuring soothing speech’s givin to quell the faithfull’s concerns. I have a source at a local Dodge Dealership where in 2006 I bought my 3rd Ram. MDS Hemi 4×4 SLT loaded. In 2007 an R/T Charger with Road and Track option, also loaded. I have owned Mopars since late 60’s. The 2 currently in my driveway are very well designed and built. The Charger is I think very good on fuel when drivin by my wife. Truck as well (when driven by wife). MDS is Hybrid in my book. No problems or complaints with either. One small reprogram computer recall on Truck. 10 minutes. Some one tell me please that in light of the current pain Im suffering in my investments for retirement is not going to be compounded by some shady sneak attack to finish off the last vestage of American vitality in the form of American rear drive Muscel cars and their Icon Company’s as I know them. Im not sure my ticker (finacial or heart) can deal with much more. Thousands more lost middle class jobs to top off our going away present from our current president. I better order my Challenger R/T 6 spd std shift soon. That will give me 3 New Hemi’s to make due with till Im gone or to old to drive.
God Bless America, Its Middle Class and its Muscel Car’s
J.P
I too can not believe the mess this country is in nor the trouble our auto industry is in. I for one feel the media is brain washing our citizens on foreign cars. I have been buying mopars since 1966 and have never had a major problem with one yet and I have over 2,000,000 miles in them. I feel for years the media and magazines have always been overly criticle of Chrysler built cars. I also feel there should be an import tariff and quota on all foreign items. There is on American goods going into their countries. I personally only buy an auto made in the USA or Canada.
One thing I have felt the American auto makers could do is combine and sell each others products. It would give a broader sales base to the people. I live in the country and depending on where you live could be up to 50 miles to find a car…. some people won’t travel that far and only buy what is in the local town.
The Federal gov’t and big business leaders have sold the American people out for greed and the LOVE of money. We are to blame for the Death of America. too much to say here but you can read at the site listed below. If you value your countries survival… read the website….
( http://www.johnsoncitypress.com/phpBB2/viewtopic.php?t=175&sid=cd9991260c7e86f56f0e3b876b36b1a0 )
http://www.webspawner.com/users/morparmtn/index.html
A country that has to import all it’s products is a Third World Country. To me it looks like we are on the way. We need to save all the auto companies.
MAYBE WE COULD USE THE 10 BILLION DOLLARS SPENT EVERY MONTH IN OUR WAR?????TO HELP SAVE AMERICANS IN NEED,WHEN THE AUTO MAKERS FALL WE ALL LOSE, TALK ABOUT THE GREAT DEPRESSION!!!!!!
[...] statement made by a source who wishes to remain anonymous reinforces my earlier opinion. To summarize [...]
OK, I was totally wrong here