Another quick explanation for November 4
Much has been written about how the Chrysler-GM-GMAC-Cerberus deal (in reverse order of profitability) is slated to occur by November 4. Not much has been written about the reasons, though I proposed the only sensible (to me) explanation a few days ago - that any news coming out on November 4 would be largely ignored.
Another credible reason has recently come up, though, in eWeek magazine, of all places. Joe Wilcox wrote about Microsoft’s attempts to buy Yahoo, thereby getting a serious stake in the paid search and (perhaps more important to them) portal business. To quote:
There is no leadership. Congress is in recess for campaigning. George W. Bush is making speeches and promises actually trying to be a leader, but no one is listening. But come November 5, there will be a leader-elect who can put forth a recovery plan, calm investors, and bring some sanity to the insane panic that is driving world economies to recession and many businesses to ruin.
To me, that makes a lot more sense than any ideas about having to quickly get Federal aid before the election, because it takes months for the results of the election to actually have any impact on the people who are in office (Bush and the Congress will still be in place throughout November and December.)
Cerberus may be figuring that GM’s stock will rise after November 5, making an acquisition of a stake in GM much more expensive. Likewise, the moment sales rise, GM’s stockholders and directors will start coming back to thinking they can go it alone — which I really think they can, if they start firing on all four cylinders instead of complacently pretending we’re still in the 1970s, when times were bad for GM but nobody thought they could disappear completely.
???….If I’m reading this right….and figuring in Dan Quayles comment on the news page….is Cerberus buying GM?…as in opposed to GM taking over Chrysler, Chrysler would in fact be taking over GM?
That is what our source, who wanted not to be named, said.
http://www.allpar.com/weblogs/2008/10/17/what-if-cerberus-isnt-selling-chrysler-but-buying-gm/
Note to GM: Dont trust a two headed dog that guards the gates of hell, Chrysler did and look where ot got them!
Ahhh, isn’t it a three headed dog?
Dave (and Joe Wilcox) have hammered the crap out of the nails head.
No one is watching the store now. Thats why this has to be brought forth in a many venues as possible.
There is nothing to be gained at this point by publicly giving the impression that Chrysler can be saved, which is highly doubtful. What must be pounded into the politic-numbed heads of the American public is that there are tens of thousands of production jobs on the line here. And that Quayle and his co-harts are about to get a lot of milk without buying a cow.
American business is American business. They are businesses that manufacturer product within the United States of American (and to a lesser extent, Canada) and have their headquarters here. They are also the only businesses that create spendable money here.
Cerberus and all the other concerns that are reaping the big bucks from sending OUR production lines to Asia and Mexico are the money changers. They take money created somewhere, anywhere and change it in to obscene profits that are retained within their pockets. The monies they take may be from manufacturers (foreign or domestic), other money changers (foreign or domestic), service providers like Insurance companies, medical facilities, etc. or government bailouts, such as GMAC will get after the election.
BMW, Honda and Toyota are foreign businesses that have production facilities here. Any monies realized from those production lines that are not needed for re-investing into those lines go to the companies HQ in their country of origin.
Service businesses are businesses that help spread around the money that is only made by producing product. These monies cannot support anyone unless there are enough production jobs to earn the money to spread.
Congress is group of people that are very much worried about their well-being first, their parties well-being second and little else. Especially right now.
The President of the United States is a lame-duck and has little power to do much of anything at this point, even if he had a clue.
We (AllPar readers) and a few columnists on some of the financial pages are the few that know this and must help spread the word around.
I really do not want to see Chrysler be bought out my GM. I believe this to be a bad move for both companies, and it seems to me, that Chrysler is going to get the short end of the stick. I currently drive, and still paying on a 2003 Dodge Ram pick-up, and would really like to sell it, because I do not want to be associated with General Motors.
This is very heart breaking. Now instead of the Detroit 3, it’ll become the Detroit 2.
It just goes to show that in business it’s all about the Benjamins.