GM and Chrysler are in Merger talks!

[Robert Hall]

That would be selfish and sad.

I would miss Chryser, Dodge & Jeep. SPEAK FOR YOURSELF, the market would not miss them.

That's a great plan.... have Hon-DUH & Toyo-DUR pick up a nice big chunk of their market share.

Without Chrysler, their LX platform, (V10/Cummins TD-I6) Ram pickups of the 1990s, and other daring products like

Viper, Prowler, and even the PT, the American car market would be much sadder and more pathetic.

This may be a GM forum but spitting on Chrysler's image, history & importance is despicable.

I would definitely miss Jeep and their RWD cars!

[CMG]

GM could use their minivans, since GM has given up on them.

Volkswagen, Chrysler, Dodge..... how many Chrysler minivans can there be?!?!

Like I said, I sure hope it ain't gonna happen. Chrysler already rebadges too many vehicles. Forget letting every other company rebadge their vehicles too IMO.

[CMG]

That would be selfish and sad.

I would miss Chryser, Dodge & Jeep. SPEAK FOR YOURSELF, the market would not miss them.

That's a great plan.... have Hon-DUH & Toyo-DUR pick up a nice big chunk of their market share.

Without Chrysler, their LX platform, (V10/Cummins TD-I6) Ram pickups of the 1990s, and other daring products like

Viper, Prowler, and even the PT, the American car market would be much sadder and more pathetic.

This may be a GM forum but spitting on Chrysler's image, history & importance is despicable.

That's MY take too.

Without Chrysler things (domestically) would get boring FAST. I like their "off the beaten track" path they have taken, sometimes successfully, sometimes not.

The more DOMESTIC competition there is the better as far as I'm concerned. Soon it will be one domestic merged blob against all the imports. Something I sure don't want to ever see.

[Robert Hall]

Cerberus is a MONEY management type company, what would they want with GM in a time of economic downturn? I'm guessing it's NOT gonna happen.

Maybe Cerebus is looking at unloading Chrysler on GM..

[PurdueGuy]

[statingtheobvious]If the market keeps doing what it's doing, I think we can expect the market to get really boring no matter what happens. No one is going to have money for fancy cars.[/statingtheobvious]

[Oracle of Delphi]

GM's going to take Chrysler's money and her key assets, and leave her like a 5 dollar whore by the side of the road, bruised, bloodied and near death .

Edited October 11, 2008 by Pontiac Custom-S

[Sixty8panther]

That's MY take too.

Without Chrysler things (domestically) would get boring FAST. I like their "off the beaten track" path they have taken, sometimes successfully, sometimes not.

Yes, agreed. From the amazing art deco cars of the 1930s to the

Imperials of days gone by, the WWII-air raid siren HEMI V8s that

made their way into so many hot rods and by extension gave birth

to the HEMI's second coming in the 1960s, the Virgil Exner era as

well as the wacky 1960s and 1970s mopars, to the post-K-car era

of cab-forward and RWD..... Chrysler is a bright, shining proud star

on the flag of American Automotive (Living) Legends.

[CMG]

LOL

I guess you guys figure that Cerberus is a bunch of nimwits.

Somehow I have a feeling the common concensus here isn't based on people with economic degrees, but wishful thinking by the common internet folk.

It's speculation on a possible merger, and I doubt it's going to happen. I'll wait to see what happens in REAL LIFE before passing judgement! lol

:AH-HA_wink:

[CMG]

Yes, agreed. From the amazing art deco cars of the 1930s to the

Imperials of days gone by, the WWII-air raid siren HEMI V8s that

made their way into so many hot rods and by extension gave birth

to the HEMI's second coming in the 1960s, the Virgil Exner era as

well as the wacky 1960s and 1970s mopars, to the post-K-car era

of cab-forward and RWD..... Chrysler is a bright, shining proud star

on the flag of American Automotive (Living) Legends.

Even Chrysler's failures were standouts at times.

The Airflows were NOT hot sellers, but they were "cars before their times" IMO.

I love alot of automotive stuff, domestic and imported, the stuff I love the most is NOT the "mainstream" or "safe" stuff. I don't like mid 80's Toyota Corollas despite how many zillions were sold.

The truly inspirational cars over time were mostly all "off the beaten path" in ways. That's why I've always liked MoPars.

Less domestic competition is NOT a good thing IMO. It's a bad thing.

[longtooth]

LOL

I guess you guys figure that Cerberus is a bunch of nimwits.

Somehow I have a feeling the common concensus here isn't based on people with economic degrees, but wishful thinking by the common internet folk.

It's speculation on a possible merger, and I doubt it's going to happen. I'll wait to see what happens in REAL LIFE before passing judgement! lol

:AH-HA_wink:

Well then, in "REAL LIFE" as you are pleased to put it, how does the evaporation of wealth sit with you? There is no guide-book to consult for a solution to what we're facing now. No "Market Crash Analysis for Dummies". Pro-active trumps inactive here. Being prudent is one thing but he/she that hesitates may be lost.

[CMG]

Well then, in "REAL LIFE" as you are pleased to put it, how does the evaporation of wealth sit with you? There is no guide-book to consult for a solution to what we're facing now. No "Market Crash Analysis for Dummies". Pro-active trumps inactive here. Being prudent is one thing but he/she that hesitates may be lost.

Swallowing up domestic competition is NOT what GM needs.

A guidebook to the market crash would be akin to a guidebook to "how to stop a tidal wave" IMO too. The economy has to turn around, and no single elected politician, no single piece of legislation, and no one single strategy is going to "fix" the situation. Domestic cars are in trouble, but they are NOT the "only thing" in trouble. They are a true "big ticket" item, and they will therefore be first to feel a huge economic crunch like is happening now.

To keep domestics afloat there has to be more purchases of domestics. This merger possibility will do nothing whatsoever for that scenario IMO.

[longtooth]

Swallowing up domestic competition is NOT what GM needs.

A guidebook to the market crash would be akin to a guidebook to "how to stop a tidal wave" IMO too. The economy has to turn around, and no single elected politician, no single piece of legislation, and no one single strategy is going to "fix" the situation. Domestic cars are in trouble, but they are NOT the "only thing" in trouble. They are a true "big ticket" item, and they will therefore be first to feel a huge economic crunch like is happening now.

To keep domestics afloat there has to be more purchases of domestics. This merger possibility will do nothing whatsoever for that scenario IMO.

IMO: It'd remove continuing excess in the over-supply. GM/Chrysler realize the dire nature of the situation. America is part and parcel of the levelling of the global playing field. Trade agreements will require transparency going forward. Patriotism could be construed as providing economic security for the citizenry here.

'Charity' begins at home.

[CMG]

IMO: It'd remove continuing excess in the over-supply. GM/Chrysler realize the dire nature of the situation.

If present sales over whatever length of time for both companies combined are 1,000,000- and GM makes up 800,000 and Chrysler makes up 200,000 for the total, how will merging the two companies increase the sales of domestics?

If they merge the combined company will have to manufacture and sell 1,000,000 cars to stay in the same production numbers. Because 200,000 Chryslers won't be "counted" in what you seem to imply, it doesn't make sense in the big picture. It is DECREASING domestic sales if less than 1,000,000 vehicles sell.

It's NOT the way IMO, but I'm sure many will disagree.

[FUTURE_OF_GM]

How government and labor react to a potential merger of G.M. and Chrysler is unclear. There could be antitrust questions raised, but political issues could be overshadowed by the precarious financial prospects of both automakers.

Umm, what?

Since when does our government actually regulate business? Oh, wait, I forgot. This is Detroit and the government will do anything it can to screw them over.

Antitrust over 33% (or likely less in a year) market share? WTF?

If G.M., the nation’s largest automaker, combined operations with Chrysler, the smallest of Detroit’s Big Three, they would create an auto giant that would surpass Japan’s Toyota Motor Company, which recently has been battling G.M. for bragging rights as the world’s largest automaker.

Umm, yeah. Except it wouldn't take that much over what GM has now (share-wise) to surpass Toyota, so this isn't as EPIC as the article makes it out to be.

I'll tell you what this boils down to...

Cerberus and GM have been talking technology tie ups for A LONG time now. But now that the market has soured, Chrysler is bleeding Cerberus. So Cerberus is looking to unload Chrsyler, probably a lot earlier than it had originally planned. GM is a natural because of the strategic advantages that could be gained (Despite the HUGE risks) but Nissan is probably more likely to happen.

What would you say if there were discussions to spin off GME, GMDAT and GM Holden? Or to close GMNA down altogether?

I'd say that's about the dumbest thing I've ever heard.

And I'd say the american government and media had finally succeeded in destroying GM.

I don't know, this all sounds like a media created story to me. I've thought about this from multiple angles and I can't come up with any sort of logic as to how it makes sense for either company.

It probably is... The goal would be to de-value GM that much more.

Edited October 11, 2008 by FUTURE_OF_GM

[FUTURE_OF_GM]

GM has a deep enough hole to dig out of by itself...they don't need any more extra baggage with Chrysler.

GM-Chrysler = Chevrolet, Dodge, Pontiac, Saturn, Chrysler, Buick, Cadillac, GMC, Jeep, Saab, Opel, Holden, Vauxhall. That is one big mess. It will only give GM another excuse to kill off or neuter more brands. Say goodbye to Pontiac and GMC, and maybe Dodge or Chrysler if this happens.

Merging GM and Chrysler will further dilute what makes each company unique.

True that. But I would rather see the company remain american.

What's interesting in this is that Cerberus already owns 51% of GMAC... so I wonder how much of a meltdown this would really cause.

In any case, GM's small-car portfolio is much stronger than Chrysler's, so I'd bet it'd be Chrysler's part that gets the ax. Of course, they could ditch Pontiac and make the G6 the new Sebring, the G3 a new Neon, G8 the new 300, etc...

In any case, it could depend on how much cash Cerberus has on-hand - with GM's market cap currently around $3 billion, it could be bought outright via leveraging on asset sell-off (kinda like what happened with K-Mart and Sears).

If anything, Chrysler would be a better replacement for Buick. (And I don't think that would EVER happen)

Safe: Chevy, Cadillac, Jeep, Opel

Question Mark: Buick, Chrysler, Saturn

Dead as a Doornail: Dodge, Pontiac, GMC

Why does everyone here seem to think that Chrysler is in so much better shape than Dodge?!?!

If ANYTHING, Chrysler is the WEAKEST division at Chrysler Corp.

Lateral move at best... LX can't support a 6A, Zeta can't be AWD (I think).

I thought LY was coming on line soon? Or has it been canceled too?

Edited October 11, 2008 by FUTURE_OF_GM

[longtooth]

It probably is... The goal would be to de-value GM that much more.

For what it is worth: Yesterday President Bush remarked that the SEC would go after anyone trashing stocks with intent to devalue. The entire system would benefit from such vigilance.

[longtooth]

If present sales over whatever length of time for both companies combined are 1,000,000- and GM makes up 800,000 and Chrysler makes up 200,000 for the total, how will merging the two companies increase the sales of domestics?

If they merge the combined company will have to manufacture and sell 1,000,000 cars to stay in the same production numbers. Because 200,000 Chryslers won't be "counted" in what you seem to imply, it doesn't make sense in the big picture. It is DECREASING domestic sales if less than 1,000,000 vehicles sell.

It's NOT the way IMO, but I'm sure many will disagree.

I was explicit enough. I did not infer what you have stated.

[FUTURE_OF_GM]

That would be selfish and sad.

I would miss Chryser, Dodge & Jeep. SPEAK FOR YOURSELF, the market would not miss them.

That's a great plan.... have Hon-DUH & Toyo-DUR pick up a nice big chunk of their market share.

Without Chrysler, their LX platform, (V10/Cummins TD-I6) Ram pickups of the 1990s, and other daring products like

Viper, Prowler, and even the PT, the American car market would be much sadder and more pathetic.

This may be a GM forum but spitting on Chrysler's image, history & importance is despicable.

While I agree with you, I can see his point as well.

Sadly, I don't think the market would miss MOST of our proud domestic brands. People just don't give a $h! anymore.

As far as divisions go...

Well, I could see this scenario definitley happening: (Sadly) Dodge replacing Pontiac and maybe even GMC (Because Dodge can make and sell more trucks than GMC and Dodge has a stronger image of sporty cars than Pontiac -- to most, all in one division.

Jeep would be the spiritual successor to Hummer. (That's a natural)

Chrysler would go the way of Oldsmobile, along with Pontiac and maybe GMC & Hummer.

That's MY take too.

Without Chrysler things (domestically) would get boring FAST. I like their "off the beaten track" path they have taken, sometimes successfully, sometimes not.

The more DOMESTIC competition there is the better as far as I'm concerned. Soon it will be one domestic merged blob against all the imports. Something I sure don't want to ever see.

It already is...

Thank the media and citizens for that.

Edited October 11, 2008 by FUTURE_OF_GM

[FUTURE_OF_GM]

GM's going to take Chrysler's money and her key assets, and leave her like a 5 dollar whore by the side of the road, bruised, bloodied and near death .

Isn't that pretty much what Daimler did in the first place?

Even Chrysler's failures were standouts at times.

The Airflows were NOT hot sellers, but they were "cars before their times" IMO.

I love alot of automotive stuff, domestic and imported, the stuff I love the most is NOT the "mainstream" or "safe" stuff. I don't like mid 80's Toyota Corollas despite how many zillions were sold.

The truly inspirational cars over time were mostly all "off the beaten path" in ways. That's why I've always liked MoPars.

Less domestic competition is NOT a good thing IMO. It's a bad thing.

I think that's why I've migrated from Chevrolet more to Pontiac as far as GM is concerned.

If present sales over whatever length of time for both companies combined are 1,000,000- and GM makes up 800,000 and Chrysler makes up 200,000 for the total, how will merging the two companies increase the sales of domestics?

If they merge the combined company will have to manufacture and sell 1,000,000 cars to stay in the same production numbers. Because 200,000 Chryslers won't be "counted" in what you seem to imply, it doesn't make sense in the big picture. It is DECREASING domestic sales if less than 1,000,000 vehicles sell.

It's NOT the way IMO, but I'm sure many will disagree.

I agree...

The whole "merger" fest we've seen in the past 30 years (In every business segment) has done nothing but homogenize product, limit technology and eff over consumers.

Talk about antitrust issues... Why do I not get to choose who I get my electricity or natural gas from? Why can I only buy from one supermarket? (In the rural south a lot of times one brand dominates the whole area)

Yet these idiots (government and analysts) are worrying about a merger of 33% market share...

Edited October 11, 2008 by FUTURE_OF_GM

[daves87rs]

Or how about GM takes the $11 billion Chrysler supposedly has on hand while picking select Chrysler assets for themselves and closes/liquidates the rest of Chrysler LLC. 2009 is projected to be one of the worst years in 25 years. I highly doubt the market will miss Chrysler and Dodge.

GM needs the cash not Chrysler LLC.

[daves87rs]

GM's going to take Chrysler's money and her key assets, and leave her like a 5 dollar whore by the side of the road, bruised, bloodied and near death .

That I can live with....

[ZL-1]

Or how about GM takes the $11 billion Chrysler supposedly has on hand while picking select Chrysler assets for themselves and closes/liquidates the rest of Chrysler LLC. 2009 is projected to be one of the worst years in 25 years. I highly doubt the market will miss Chrysler and Dodge.

GM needs the cash not Chrysler LLC.

How much cash will GM and Chrysler burn through the whole process, though?

[CMG]

I was explicit enough. I did not infer what you have stated.

Then when you wrote THIS, what did you possibly mean??!?

IMO: It'd remove continuing excess in the over-supply.

How would a merger remove ANY "over supply"? A single company would be pumping out the same products, and would need an increase in sales from the COMBINATION of both companies to improve.

I don't see your point.

[FAPTurbo]

GM's going to take Chrysler's money and her key assets, and leave her like a 5 dollar whore by the side of the road, bruised, bloodied and near death .

Now that's a plan I'd agree with; I'd especially love to see GM pick up Jeep if at all possible.

[CMG]

QUOTE(Pontiac Custom-S @ Oct 11 2008, 09:59 AM)

GM's going to take Chrysler's money and her key assets, and leave her like a 5 dollar whore by the side of the road, bruised, bloodied and near death .

Now that's a plan I'd agree with

LOL

It's amazing that people here actually think Cerberus is just gonna toss cash and assets at GM and walk away.

Amazing.

Edited October 11, 2008 by CMG

[Blake Noble]

Wow, there's so much hate against Chrysler in here I can almost cut it with a knife.

[CMG]

Wow, there's so much hate against Chrysler in here I can almost cut it with a knife.

I've never seen so many people on one forum blinded by brand in my life.

I'm astonished there isn't such hatred here towards Toyota etc.... Why hate the little guy is far beyond me?

*shrugs*

[Toyota.vs.GM]

LOL

It's amazing that people here actually think Cerberus is just gonna toss cash and assets at GM and walk away.

Amazing.

Cerberus would become GM largest shareholder.It's very likely that GM stock goes from $5.00 a share to $150+ a share , now think about all the money Cerberus would have made off of GM raping and killing Chrysler far worster than Daimler ever did.

That just gave me an idea :

Ford is next to be raped by

[CMG]

Cerberus would become GM largest shareholder.It's very likely that GM stock goes from $5.00 a share to $150+ a share , now think about all the money Cerberus would have made off of GM raping and killing Chrysler far worster than Daimler ever did.

That just gave me an idea :

Ford is next to be raped by

LOL

The import crowd must be laughing reading all these threads and posts.

[smk4565]

Chrysler has nothing to bring to the table, none of their stuff is competitive anymore, their interiors are bad, engines are dated and unrefined, and the LX platform is old too. Chrysler and GM are both too deep in debt, with declining revenue and not turning a profit. If either were that appealing to buy, Toyota would have done it already. I don't think this merger will happen, but I do think Chrysler will be bankrupt and gone by 2015.

[CMG]

Chrysler has nothing to bring to the table, none of their stuff is competitive anymore, their interiors are bad, engines are dated and unrefined, and the LX platform is old too. Chrysler and GM are both too deep in debt, with declining revenue and not turning a profit. If either were that appealing to buy, Toyota would have done it already. I don't think this merger will happen, but I do think Chrysler will be bankrupt and gone by 2015.

LOL

Cerberus owns over 50% of GMAC don't they?

Maybe Cerberus wants to unload THAT portion of their "worthless" assets...???

[Satty]

I've never seen so many people on one forum blinded by brand in my life.

I'm astonished there isn't such hatred here towards Toyota etc.... Why hate the little guy is far beyond me?

*shrugs*

You must be blind if you dont see all the Toyota hatred on C&G. GM4life once started a thread in which he stated he wanted to kill Toyota drivers, or something to that effect.

The way I see it, Cerebrus never wanted to keep Chrysler, thats not what they do, so I wouldn't be surprised if they at least tried to feel out GM for some sort of sale/asset swap/whatever. GM could then use the Chrysler products that do sell while dumping the rest. They would have to keep at least one of the 3 brands around (probably Dodge, maybe Chrysler) to avoid having to pay out billions to close all their dealerships, even then Chrysler/Dodge dont have nearly as many shared dealerships as GM, so even closing down one sales channel would be expensive. Jeep would be a welcome addition to the GM lineup.

Think of the alternative, Toyota could buy Chrysler.

[FAPTurbo]

GM4life once started a thread in which he stated he wanted to kill Toyota drivers, or something to that effect.

I still have yet to die, too.

[Satty]

I still flash nuns everytime I drive the Prius. Wait, that was a different anti-Toyota thread, I believe started by 68.

Links to the two previously mentioned threads:

I pray their cars blow up and they die--GM4life

Let the Toyopet bashing begin

Now, back to a potential GM-Chrysler merger....

Edited October 11, 2008 by Satty

[CMG]

The way I see it, Cerebrus never wanted to keep Chrysler, thats not what they do, so I wouldn't be surprised if they at least tried to feel out GM for some sort of sale/asset swap/whatever.

Cereberus MAKES MONEY. That is what they have as a primary interest.

For GM to have the financial troubles that they do would suggest to me they aren't looking to merge/buy ANYTHING unless it is fire sale prices.

To suggest Cerberus would unload Chrysler LLC for "fire sale prices" is everything that Cerebus does NOT represent.

Can anybody not see that?

[Satty]

I was in the middle of posting essentilly the same thing as WMJ before I closed the wrong tab. My main point was the Cerebrus would be much smarter to try to make money in the future with GMAC than with Chrysler. Returning Chrysler to profitability would require a huge amount of time and money, while GMAC would rely mainly on the credit market and general economy rebounding.

[CMG]

Lending money right now doesn't seem like a solid profit maker to me.

Seems strange Cerebus would opt out of Chrysler's leasing and yet take on GMAC leasing...

Like I said, I'll believe it when I see it. Until then it's speculation, and you KNOW what I think about speculating on the internet..... :AH-HA_wink:

LOL

[Toyota.vs.GM]

Lending money right now doesn't seem like a solid profit maker to me.

Seems strange Cerebus would opt out of Chrysler's leasing and yet take on GMAC leasing...

Like I said, I'll believe it when I see it. Until then it's speculation, and you KNOW what I think about speculating on the internet..... :AH-HA_wink:

LOL

Oh GM was in talks to buy Ford. But Bill Ford said no to GM ,then GM turned to Chrysler.

Edited October 11, 2008 by Toyota.vs.GM

[Satty]

The economy will rebound sooner or later. When it does, the credit market will re-emerge, hopefully a little bit wiser. GMAC will return to profitability, its just a matter of riding out the storm. Holding on to an automaker with slipping sales isn't nearly as easy because they'll have to invest so much to keep it operating. They have to pay all their workers and pay for all the bits 'n pieces that make up their vehicles as well as put money into R&D for future models and technology. That stuffs expensive, GM could absorb most of those costs a lot more easily that Cerebrus can.

[CMG]

The economy will rebound sooner or later. When it does, the credit market will re-emerge, hopefully a little bit wiser. GMAC will return to profitability, its just a matter of riding out the storm. Holding on to an automaker with slipping sales isn't nearly as easy because they'll have to invest so much to keep it operating. They have to pay all their workers and pay for all the bits 'n pieces that make up their vehicles as well as put money into R&D for future models and technology. That stuffs expensive, GM could absorb most of those costs a lot more easily that Cerebrus can.

GM isn't in any position whatsoever to "absorb costs" right now, and it's not a strategy a financially responsible company would take.

The "deal" as it's been presented in this forum in all it shapes doesn't make much sense to me, let's see if it makes sense to GM and Cerberus.....

[CMG]

Any pics of your Nun outfit btw?

Just the worksafe ones...!

:AH-HA_wink:

[evok]

Aren't you the smart boy! I've said for over a year, GM needs to have Jeep.

I never said which assets were worth keeping and I never said GM would even get Jeep. One major wild card in the mix is Daimler as they continue to own 19.9% of Chrysler LLC. Chrysler LLC also owes Daimler at least $2 billion that comes due in 2014. They could very well want Jeep back to forgive some of that debt. Also don't forget, the NG Jeeps are to share parts with the MB utes. It may make more economic sense for Daimler to keep Jeep. Even when you factor in CAFE and the market shift away from SUVs, Jeep is a nice niche brand but its volume days are over. How many niche brands does GM have already?

General Motor, Chrysler and GMAC right now could very well fail in the next year. That is not Wall Street speculation because in case anyone has missed it, there is not much left on Wall Street anymore.

For starters, Cerberus is a heavily leveraged firm that has just seen, the liquidity in the system dry up. GMAC was caught up in ground zero of the housing bubble implosion with Residential Capital. GMAC right now faces the exact same thing as the rest of the banking industry. Now factor in Cerberus ownes the majority of Chrysler and much like GM and F, business is not the best. Cerberus's foray into automotive could very well undo them without drastic action. Between GMAC and Chrysler, Cerberus has $21 billion dollars at stake right now. Much of that borowed and given the times, the lenders could be knocking on the door. Chrysler has been conserving cash under Cerberus' ownership. That is a code term in their press releases which means they are not investing in the company (product, plants etc). The company's future has been neglected in the last 2 years. Chrysler is not worth much right now beyond the cash on hand. Sooner or later Chrysler will need new product and there is a 4-5 year lead time. They just lost 2 years. They wait any longer, Chrysler will not have the funds to be a full line manufacturer. Chrysler's fleet will look like the old days with a bunch of rebadges. There sales of dropped from 3 million to 1 million a years. That volume may be lost forever. 2/3 of the company is gone.

GM on the other hand is functionally bankrupt and the situation will only get worse as the market collapses. Let us not forget that only a few years ago the US market was at 17 million sales a year and currently is selling at a rate of 12 million. Toyota is adding huge incentives on their product and that puts pricing pressure on the domestics. The situation in the US is bad and GM does not make enough in Europe or Asia to cover them. Europe has been a money drain on them for year and still has weak traction in what is getting to be a weak market. Asia looks good for them in the press but in reality, GM just has a bunch of joint ventures with China and Daewoo and cannot account for all the profits in those operations. Now that the banking crisis has hit, GM cannot raise cash. GM also cannot sell cars to non-credit worthy buyers because GMAC will not underwrite the loans. GM is also out of the leasing business because GMAC will not underwrite the leases. The current situation is bleak and I am being kind. Hell GM is back in the fleeting business with the Malibu just to keep the cash coming in. The 50+% of Malibu sales last month is a real number.

Now why would GM and Cerberus want to do this? The simple answer is to survive. Who knows what this deal may look like but Cerberus will never gets its money back in Chrysler. So I suspect they will take a position in GM for Chrysler and in return they get full control over GMAC. Cerberus can focus on GMAC and GM can focus on automotive. There can be little cash changing hands as both GM and Cerberus are not cash rich right now. GM could give Cerberus about 20% of the company and if GM every turns around Cerberus could cash out.

If something like this goes through and GM takes on Chrysler as is or in some form, GM could argue they are too big to fail at that point (because of the potential job losses, supply base implosion, etc) to get a real bailout by the government. The US will need manufacturing to recover from the economic nighmare unfolding. They do have a good case.

I am not sure if this is happening already, but Cerberus could also make the case to open up GMAC to the fed's direct lending. GMAC right now should be eligible to sell Res Caps Mortgage backed Securities and structured auto loans if they are sitting on any that have previously been package prior to the September 2008 cut off stipulated in the $700B Financial Rescue Bill. With Cerberus owning 100% of GMAC they would not have to consult with GM to make significant structural moves.

I will be crystal clear, whatever is happening right now between Cerberus and GM is being done because they just may not have any other choice right now. Cerberus, GM, GMAC and Chrysler can very well fail. Just look at Wall St.

Now what will GM with Chrysler? Get the government's permision to resturcture a combined GM-Chrysler in the name of preserving the US auto industry. I would expect Chrysler to go away as we know it and for that matter so could GM brands and many dealers. I wrote a long piece about just that on here or CamaroZ28 back in Feb 07.

Edited October 12, 2008 by evok

[Satty]

Swapping Chrysler for the rest of GMAC makes a ton of sense for Cerebrus, since GMAC cannot cost nearly as much to run as Chrysler does and a return to profitability will probably come more quickly from GMAC. Taking on Chrysler doesn't make a lot of sense for GM, unless they do want to gut it for Jeep (to dump Hummer) and Chrysler (dump or severely consolidate Pontiac or Buick) and Dodge Trucks (dump GMC). It gives them Dodge's customer base while alienating few GM buyers. It would also give GM leverage with suppliers, if they want to move to common suppliers, current GM and Chrysler part suppliers would be bidding against each other.

[Sixty8panther]

Even Chrysler's failures were standouts at times.

The Airflows were NOT hot sellers, but they were "cars before their times" IMO.

I love alot of automotive stuff, domestic and imported, the stuff I love the most is NOT the "mainstream" or "safe" stuff. I don't like mid 80's Toyota Corollas despite how many zillions were sold.

The truly inspirational cars over time were mostly all "off the beaten path" in ways. That's why I've always liked MoPars.

Less domestic competition is NOT a good thing IMO. It's a bad thing.

Well said. You know I was going to bring up the Airflow too earlier

but trimmed it from my post.

Remember that "crash test" (Dodge) did with an unoccupied Airflow

where they rolled if off a cliff, it tumbled like a misshapen pumpkin

and landed on its wheels, and it was driven away?

(mechanically unharmed!)

I had a photo sequence of this in a book about cars, but the book

was from CzechoSlovakia (in Slovakian) and although I know I still

have it it got misplaced in the last move.

[ZL-1]

Cerberus would become GM largest shareholder.It's very likely that GM stock goes from $5.00 a share to $150+ a share , now think about all the money Cerberus would have made off of GM raping and killing Chrysler far worster than Daimler ever did.

That just gave me an idea :

Ford is next to be raped by

Let's see if, in the end, GM doesn't end up being raped by Cerberus :AH-HA_wink:

Edited October 11, 2008 by ZL-1

[Sixty8panther]

I still flash nuns everytime I drive the Prius. Wait, that was a different anti-Toyota thread, I believe started by 68.

Hhahaahaha. Feelthe love!

[regfootball]

Swapping Chrysler for the rest of GMAC makes a ton of sense for Cerebrus, since GMAC cannot cost nearly as much to run as Chrysler does and a return to profitability will probably come more quickly from GMAC. Taking on Chrysler doesn't make a lot of sense for GM, unless they do want to gut it for Jeep (to dump Hummer) and Chrysler (dump or severely consolidate Pontiac or Buick) and Dodge Trucks (dump GMC). It gives them Dodge's customer base while alienating few GM buyers. It would also give GM leverage with suppliers, if they want to move to common suppliers, current GM and Chrysler part suppliers would be bidding against each other.

wow. someone had their cheerios this morning. all that kinda made sense.

[Satty]

Woohoo! Those retard-b-gone vitamins worked!

[Camino LS6]

Believe it or not, I see this pretty much as Evok does.

This is a survival tactic and likely spells the end for Chrysler.

Sad, but I can see the logic.

[buyacargetacheck]

Maybe Cerberus wants the rest of GMAC so that it can sell some of those bad RESCAP mortgages to the Treasury under the $700B program just passed. Under this scenario, maybe the 49% of GMAC Cerberus doesn't already own is potentially worth much more than Chrysler.

What's in it for GM? Economies of scale for its platforms (cost savings and extra revenue) and a chance to slash excess capacity in the industry thereby potentially reducing incentives pressure (more cost savings).

Swapping Chrysler for the rest of GMAC makes a ton of sense for Cerebrus, since GMAC cannot cost nearly as much to run as Chrysler does and a return to profitability will probably come more quickly from GMAC. Taking on Chrysler doesn't make a lot of sense for GM, unless they do want to gut it for Jeep (to dump Hummer) and Chrysler (dump or severely consolidate Pontiac or Buick) and Dodge Trucks (dump GMC). It gives them Dodge's customer base while alienating few GM buyers. It would also give GM leverage with suppliers, if they want to move to common suppliers, current GM and Chrysler part suppliers would be bidding against each other.