Gm and Chrysler looking to MERGE

[HKCharger]

So what would it be alled? Chrygen?

http://www.nytimes.com/2008/10/11/business/11auto.html?_r=1&oref=slogin

[bull]

 

Dodgevy

Cadillysler

Plymuick

Oldsmodge

GMCerberus

Geoeep

Pontimouth

[HKCharger]

G.M. and Chrysler Explore Merger

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By BILL VLASIC and ANDREW ROSS SORKIN
Published: October 10, 2008

DETROIT — General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.
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David Zalubowski/Associated Press

General Motors and Chrysler are both struggling to sell vehicles as the economy sours.
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Times Topics: General Motors Corporation
Times Topics: Chrysler LLC
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The talks between G.M. and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were "50-50" as of Friday and would most likely still take weeks to work out.

A merger would be a historic event, with two of the most iconic names in American industry coming together to survive in an increasingly difficult environment. Both have roots dating back decades in Detroit and, with Ford, long dominated the auto industry — until Japanese and other foreign car makers began making inroads into the American market.

The auto industry is being pummeled from all sides — by high gas prices that have soured consumers on profitable S.U.V.'s, by a softening economy that has scared shoppers away from showrooms, and by tight credit that is making it difficult for willing buyers to obtain loans. Both G.M. and Chrysler have been struggling with product lineups that are out of sync with consumer demand for smaller, more fuel-efficient cars.

General Motors' stock has fallen from more than $43 a share last year to less than $5, and it is burning through its cash hoard at a rapid rate. Chrysler, as a private company, no longer needs to report its finances.

The meetings between General Motors and Cerberus began more than a month ago, said people familiar with the discussions, and the companies have held several talks involving their most senior executives. Given that both G.M. and Chrysler are struggling, the two sides may determine a merger may not be in their best interests.

The exploratory talks have included debates over various calculations of the savings that would result from a merger, these people said, but neither side has yet to dig into each others' private financial books and records.

At the same time, Cerberus is continuing to hold talks with other automakers including Nissan and Renault, said people familiar with the discussions. It is unclear at what stage those discussions have reached.

Speculation about a possible bankruptcy filing by G.M. has mounted in recent weeks because of the automaker's dwindling cash reserves. The automaker had $21 billion in cash on hand at the end of the second quarter, but it was burning through more than $1 billion a month.

The credit rating firm Standard & Poor's put G.M. on negative credit watch on Thursday.

But G.M. has said it is confident that it can increase its liquidity, and emphasized in a statement released Thursday that it was not considering a bankruptcy filing.

G.M. once commanded about 50 percent of the American vehicle market, but its share so far this year has fallen to 22 percent, according to the research firm Autodata. Chrysler had a market share of about 15 percent before its acquisition in 1998 by Daimler, but its share this year has dwindled to 11 percent.

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

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.

A G.M. spokesman declined to comment on any specific talks with Chrysler. "Without referencing this specific rumor, as we've often said G.M. officials routinely discuss issues of mutual interest with other automakers," said the spokesman, Tony Cervone.

There was no immediate comment from Cerberus.

People briefed on the deal said the talks started as an exploration of possible joint venture opportunities between G.M. and Chrysler.

Cerberus acquired an 80.1 percent stake in Chrysler in August 2007 for $7.4 billion from the German automaker Daimler AG.

Under the terms of the deal being discussed, Cerberus would end up owning an unspecified equity stake in G.M.-Chrysler, people briefed on the talks said.

The ramifications of the merger would be enormous in the global auto industry. G.M. and Chrysler together would control more than 35 percent of the United States vehicle market, and be by far the dominant producer of pickup trucks, sport utility vehicles and minivans.

It would also marry such iconic American brands as G.M.'s Chevrolet and Cadillac with Chrysler's Jeep and Dodge divisions.

However, the potential merger carries enormous risks. Both G.M. and Chrysler are struggling mightily in what is the worst market for vehicle sales in the United States in 15 years.

People close to the discussions said that if the prospective deal did not happen, Cerberus would probably look to Nissan and Renault.

But the marriage of G.M. and Chrysler has far more potential than hitching Chrysler to a foreign automaker. While G.M. and Chrysler may be hamstrung by labor contracts from cutting jobs, the two companies could combine dealers, product lines and advanced vehicle technology.

Bill Vlasic reported from Detroit and Andrew Ross Sorkin from New York. Michael J. de la Merced contributed reporting.

[mikepmcs]

http://www.dodgecharger.com/forum/index.php/topic,49556.0/topicseen.html

WOW is all I can say.

[70charginglizard]

There goes the neighborhood.

I can see it now.

Introducing the all new Chrysler Camero.

or check out my brand new Chevy Barracuda.

[HKCharger]

If it does happen, wonder what happens to FERD.

[HKCharger]

could this save the two giants? I hope GM goes belly up, they deserve it.

[Brock Samson]

you hope gm goes belly up?.. really?.. 

[HKCharger]

you hope gm goes belly up?.. really?.. 

yes, why does that make you laugh? You a GM nuthugger?

[Brock Samson]

what do you mean by that?. and why start another thread an hour after the original thread?..

[HKCharger]

what do you mean by that?. and why start another thread an hour after the original thread?..

why are you laughing at what i said?

[Troy]

what do you mean by that?. and why start another thread an hour after the original thread?..

why are you laughing at what i said?

Do you realize the impact (to people, cities, the economy, etc.) of GM closing down? Up until this year GM was the largest automobile manufacturer on the planet. He's laughing because it's a silly statement. It's sort of like saying "I wish all Raiders fans would die". It's pretty selfish as well. Brand loyalty is one thing - but I've found that it's rarely logical.

From the merger perspective, if it keeps the companies going, makes them stronger, and creates a better product then that's great. The problem is going to be getting the deal approved and, with the crazy stock market right now, a deal that both sides will be happy with. Either way, there will likely be massive cuts in production (car sales have tanked) and I'd rather see one company consolidate factories than two companies working skeleton crews and bleeding money.

By the way, I just bought a Chevy Tahoe because my experiences recently with Chrysler (specifically my Ram) have been so incredibly bad - and it's a better vehicle to boot. You guys will surely be happy to know that the last Toyota in my fleet is up for sale (but I'll probably buy a Mustang with the money).

Troy

[HKCharger]

what do you mean by that?. and why start another thread an hour after the original thread?..

why are you laughing at what i said?

Do you realize the impact (to people, cities, the economy, etc.) of GM closing down? Up until this year GM was the largest automobile manufacturer on the planet. He's laughing because it's a silly statement. It's sort of like saying "I wish all Raiders fans would die". It's pretty selfish as well. Brand loyalty is one thing - but I've found that it's rarely logical.

From the merger perspective, if it keeps the companies going, makes them stronger, and creates a better product then that's great. The problem is going to be getting the deal approved and, with the crazy stock market right now, a deal that both sides will be happy with. Either way, there will likely be massive cuts in production (car sales have tanked) and I'd rather see one company consolidate factories than two companies working skeleton crews and bleeding money.

By the way, I just bought a Chevy Tahoe because my experiences recently with Chrysler (specifically my Ram) have been so incredibly bad - and it's a better vehicle to boot. You guys will surely be happy to know that the last Toyota in my fleet is up for sale (but I'll probably buy a Mustang with the money).

Troy

Yes I do, and they NEED to FAIL. They are a horrible business plan and the government keeps pumping our TAX DOLLARS into a sinking ship/horrid business model and it's doing us NO GOOD. You and I wouldnt get bailed out if we had a small business with a bad business plan and GM needs to either get their crap together or go under.

[Neal_J]

I'd say it a bit differently - both companies are on very shakey ground.   Yes, they employ thousands but no company can sustain massive erosion of their revenues, particularly one with huge fixed costs.

So, from a business perspective, combining two turds gets you what? 

Neal

[Kevin68N71]

Troy, you are absolutely right.

Remember the yahoos that said that Chrysler never should have been bailed out in the firstplace, and all the "tax dollars out of our pockets" that went to save them?

Well, people don't seem to remember that NO TAX DOLLARS were wasted when Chrysler was bailed out, it was Government backed LOANS, not taxpayer subsidies, that were granted, which Chrysler paid back EARLY with interest.

This moves saved tens of thousands of jobs, created the minivan market, and served millions of consumers.

Sorry HK, your comparison of a personal small business to one of America's largest corporation is not a very good one.  Remember, GM is intewoven with hundreds of other companies, and other companies provide tremendous support services to them.  There is tons of international revenue as well.

Let's see, the GOVERNMENT demands increasing fuel efficiency, which costs tremendous amounts of money, unions require idiotic benefits, retirees expect a salary until they are dead, and on and on.  Add into this an automotive press that has always hated domestic product, and a fuel crunch that favored imports.  But for all these reasons, GM should just go away.  Yeah, that's great thinking.

Let me guess, you had a 1982 Nova that got a flat tire, and you're still pissed off at GM about it.

[The70RT]

Troy - What happened with the Toyota? 

[HKCharger]

Troy, you are absolutely right.

Remember the yahoos that said that Chrysler never should have been bailed out in the firstplace, and all the "tax dollars out of our pockets" that went to save them?

Well, people don't seem to remember that NO TAX DOLLARS were wasted when Chrysler was bailed out, it was Government backed LOANS, not taxpayer subsidies, that were granted, which Chrysler paid back EARLY with interest.

This moves saved tens of thousands of jobs, created the minivan market, and served millions of consumers.

Sorry HK, your comparison of a personal small business to one of America's largest corporation is not a very good one.  Remember, GM is intewoven with hundreds of other companies, and other companies provide tremendous support services to them.  There is tons of international revenue as well.

Let's see, the GOVERNMENT demands increasing fuel efficiency, which costs tremendous amounts of money, unions require idiotic benefits, retirees expect a salary until they are dead, and on and on.  Add into this an automotive press that has always hated domestic product, and a fuel crunch that favored imports.  But for all these reasons, GM should just go away.  Yeah, that's great thinking.

Let me guess, you had a 1982 Nova that got a flat tire, and you're still pissed off at GM about it.

Oh so let me guess, you were in support of the massive 700 billion dollar bailout plan the govt just passed?

[Ghoste]

Well, people don't seem to remember that NO TAX DOLLARS were wasted when Chrysler was bailed out, it was Government backed LOANS, not taxpayer subsidies, that were granted, which Chrysler paid back EARLY with interest.

And to make it even clearer, this means that Chrysler was still borrowing the money from lending institutions, the feds were only promising to pay the debt if Chrysler defaulted.  Like being a co-signer for a fee.  If you think the economy is in the toilet now from the hit the mortgage companies took then you beter believe killing off GM would be the last nail in the economic coffin.

[HKCharger]

Troy, you are absolutely right.

Remember the yahoos that said that Chrysler never should have been bailed out in the firstplace, and all the "tax dollars out of our pockets" that went to save them?

Well, people don't seem to remember that NO TAX DOLLARS were wasted when Chrysler was bailed out, it was Government backed LOANS, not taxpayer subsidies, that were granted, which Chrysler paid back EARLY with interest.

This moves saved tens of thousands of jobs, created the minivan market, and served millions of consumers.

Sorry HK, your comparison of a personal small business to one of America's largest corporation is not a very good one.  Remember, GM is intewoven with hundreds of other companies, and other companies provide tremendous support services to them.  There is tons of international revenue as well.

Let's see, the GOVERNMENT demands increasing fuel efficiency, which costs tremendous amounts of money, unions require idiotic benefits, retirees expect a salary until they are dead, and on and on.  Add into this an automotive press that has always hated domestic product, and a fuel crunch that favored imports.  But for all these reasons, GM should just go away.  Yeah, that's great thinking.

Let me guess, you had a 1982 Nova that got a flat tire, and you're still pissed off at GM about it.

Chrysler is paying those govt loans back in the truest form of bankruptcy, look at the details of their renegotiated loans. They are paying 30 cents on the dollar back, not dollar for dollar.

[Mike DC]

They're insane. 


Seriously, this sounds like something that the Bush administration would have come up with.  One of these Perfect-Storm bad ideas . . . you just can't help but marvel at it.

[Troy]

Troy, you are absolutely right.

Remember the yahoos that said that Chrysler never should have been bailed out in the firstplace, and all the "tax dollars out of our pockets" that went to save them?

Well, people don't seem to remember that NO TAX DOLLARS were wasted when Chrysler was bailed out, it was Government backed LOANS, not taxpayer subsidies, that were granted, which Chrysler paid back EARLY with interest.

This moves saved tens of thousands of jobs, created the minivan market, and served millions of consumers.

Sorry HK, your comparison of a personal small business to one of America's largest corporation is not a very good one.  Remember, GM is intewoven with hundreds of other companies, and other companies provide tremendous support services to them.  There is tons of international revenue as well.

Let's see, the GOVERNMENT demands increasing fuel efficiency, which costs tremendous amounts of money, unions require idiotic benefits, retirees expect a salary until they are dead, and on and on.  Add into this an automotive press that has always hated domestic product, and a fuel crunch that favored imports.  But for all these reasons, GM should just go away.  Yeah, that's great thinking.

Let me guess, you had a 1982 Nova that got a flat tire, and you're still pissed off at GM about it.

Oh so let me guess, you were in support of the massive 700 billion dollar bailout plan the govt just passed?

Who is bailing out GM? You have me confused. I believe businesses should be responsible for themselves and if they screw it up then they need to face the consequences. This particular merger is a way to strengthen both companies (presumably) without having to rely on the government (taxpayers). There are millions of small businesses with horrible business models. Those businesses don't grow to the size of GM. Perhaps you can elaborate?

Troy - What happened with the Toyota? 

Nothing - it's just too small to tow a trailer (Tacoma) and now that I have another vehicle to drive every day that is also capable of towing then I really don't need it. The Ram is for sale also (for the opposite reason - it's too big to drive every day and it mostly sits in the driveway).

Troy

[Kevin68N71]

Uh, yes, I am for the government involvement in straightening out the financial mess.  No one else could.  By the way, the government, not wall street, created that mess my insisting that loan institutions make up to 50% of their portfolios comprised of lousy loans to losers that weren't going to pay them.  Barney Frank and team should be run out of town on a rail.  ACORN is such scum that they are even now being shown as involved with voter fraud.  And so, yeah, the government should help and do all it can to prevent a total meltdown, a problem that they created.

What is your brainiac idea?  Let em all fail?  Let all the homes go in foreclosure, ruin more banks, put more insurance companies at risk and forcing them to fold, watch YOUR home price go down to nothing, watch business after business fail because there are no longer credit lines available, and watch retail prices zoom skyward because of limited supplies of everything.  Followed shortly by the worst recession imaginable and maybe even a depression.

Yeah, smart, let's put your business plan in action.

[HKCharger]

Troy, you are absolutely right.

Remember the yahoos that said that Chrysler never should have been bailed out in the firstplace, and all the "tax dollars out of our pockets" that went to save them?

Well, people don't seem to remember that NO TAX DOLLARS were wasted when Chrysler was bailed out, it was Government backed LOANS, not taxpayer subsidies, that were granted, which Chrysler paid back EARLY with interest.

This moves saved tens of thousands of jobs, created the minivan market, and served millions of consumers.

Sorry HK, your comparison of a personal small business to one of America's largest corporation is not a very good one.  Remember, GM is intewoven with hundreds of other companies, and other companies provide tremendous support services to them.  There is tons of international revenue as well.

Let's see, the GOVERNMENT demands increasing fuel efficiency, which costs tremendous amounts of money, unions require idiotic benefits, retirees expect a salary until they are dead, and on and on.  Add into this an automotive press that has always hated domestic product, and a fuel crunch that favored imports.  But for all these reasons, GM should just go away.  Yeah, that's great thinking.

Let me guess, you had a 1982 Nova that got a flat tire, and you're still pissed off at GM about it.

Oh so let me guess, you were in support of the massive 700 billion dollar bailout plan the govt just passed?

Who is bailing out GM? You have me confused. I believe businesses should be responsible for themselves and if they screw it up then they need to face the consequences. This particular merger is a way to strengthen both companies (presumably) without having to rely on the government (taxpayers). There are millions of small businesses with horrible business models. Those businesses don't grow to the size of GM. Perhaps you can elaborate?

Troy - What happened with the Toyota? 

Nothing - it's just too small to tow a trailer (Tacoma) and now that I have another vehicle to drive every day that is also capable of towing then I really don't need it. The Ram is for sale also (for the opposite reason - it's too big to drive every day and it mostly sits in the driveway).

Troy

Who do you think will be on the hook to pay for those loans if they default on those loans as they appear they will?

[Brock Samson]

what do you mean by that?. and why start another thread an hour after the original thread?..

why are you laughing at what i said?

Do you realize the impact (to people, cities, the economy, etc.) of GM closing down? Up until this year GM was the largest automobile manufacturer on the planet. He's laughing because it's a silly statement. It's sort of like saying "I wish all Raiders fans would die". It's pretty selfish as well. Brand loyalty is one thing - but I've found that it's rarely logical.

Troy

  as usual Troy nails it.

[Troy]

Troy, you are absolutely right.

Remember the yahoos that said that Chrysler never should have been bailed out in the firstplace, and all the "tax dollars out of our pockets" that went to save them?

Well, people don't seem to remember that NO TAX DOLLARS were wasted when Chrysler was bailed out, it was Government backed LOANS, not taxpayer subsidies, that were granted, which Chrysler paid back EARLY with interest.

This moves saved tens of thousands of jobs, created the minivan market, and served millions of consumers.

Sorry HK, your comparison of a personal small business to one of America's largest corporation is not a very good one.  Remember, GM is intewoven with hundreds of other companies, and other companies provide tremendous support services to them.  There is tons of international revenue as well.

Let's see, the GOVERNMENT demands increasing fuel efficiency, which costs tremendous amounts of money, unions require idiotic benefits, retirees expect a salary until they are dead, and on and on.  Add into this an automotive press that has always hated domestic product, and a fuel crunch that favored imports.  But for all these reasons, GM should just go away.  Yeah, that's great thinking.

Let me guess, you had a 1982 Nova that got a flat tire, and you're still pissed off at GM about it.

Oh so let me guess, you were in support of the massive 700 billion dollar bailout plan the govt just passed?

Who is bailing out GM? You have me confused. I believe businesses should be responsible for themselves and if they screw it up then they need to face the consequences. This particular merger is a way to strengthen both companies (presumably) without having to rely on the government (taxpayers). There are millions of small businesses with horrible business models. Those businesses don't grow to the size of GM. Perhaps you can elaborate?

Troy - What happened with the Toyota? 

Nothing - it's just too small to tow a trailer (Tacoma) and now that I have another vehicle to drive every day that is also capable of towing then I really don't need it. The Ram is for sale also (for the opposite reason - it's too big to drive every day and it mostly sits in the driveway).

Troy

Who do you think will be on the hook to pay for those loans if they default on those loans as they appear they will?

You're the one saying they should go "belly up". I said they should merge if it helps the companies stay in business. If they both stay in business your point is moot.

Troy