GM-Chrysler push for quick deal

[Dirty]

By Sharon Silke Carty and Chris Woodyard, USA TODAY
DETROIT — Negotiators hope to finalize a merger agreement between General Motors (GM) and Chrysler before the presidential election and are lobbying for government financial assistance to help clinch the deal, says a source who has been briefed on the talks.
They are pointing to the impact on the U.S. economy if either company were to fail, compared with the viability of a merged colossus that would control 36% of the U.S. auto market. Those are the chief selling points in asking for government help, says the source, who did not want to be identified because talks are not public.
Cerberus Capital Management, which controls Chrysler, has been pushing to make GMAC, GM's financing arm, a significant part of the deal. Cerberus already owns more than 50% of GMAC but wants it all. The source says that's been a sticking point because GM has said it won't give up its stake.
Talks are expected to continue this week, underscoring the pace at which a fundamental reshaping of the auto industry is taking place.
Ford Motor is seeking to sell all or part of its stake in Japan's Mazda to a group of Japanese companies. The report appeared in the Japanese press last week and was confirmed by two people who have been briefed on the proposal but said they could not comment on the record.
FIND MORE STORIES IN: Japan | Detroit | General Motors | Los Angeles | Center for Automotive Research | David Cole | Mazda | GM-Chrysler | Hummer SUV | Woodyard
Industry consolidation is being driven by fears of a prolonged recession that has already resulted in plant closings and production cuts. The automakers need cash, and lots of it, to weather the downturn.
Chrysler workers would be vulnerable if the GM deal goes through. GM wants to use Chrysler's $11.7 billion in cash to shut down most of Chrysler's operations while keeping its brands, the source says. GM has been shrinking, too, most recently by trying to sell its Hummer SUV line.
Yet after years of withering, a combined GM and Chrysler could command government attention if the world's largest automaker hits even rockier times. "If they do come together, they really do become too big to fail," says David Cole, chairman of the Center for Automotive Research.
Congress recently approved a $25 billion loan program for Detroit's Big 3 aimed at helping fund development of more fuel-efficient vehicles. It's unclear just what form government assistance might take in a GM-Chrysler deal.
Carty reported from Detroit, Woodyard from Los Angeles





GM-Chrysler push for quick deal - USATODAY.com

[cassiusclay]

this is insane. chrysler has 11.7 billion in cash and their stock is 5 times what gm is at and gm is going to purchase chrysler? gm stock is a minute away from being junk and they are predicted to be out of cash by the middle of next year.

[YeahBoyHowdy]

nothing will save GM at this point. they sunk what was once a great company with poor management decisions and put many of their suppliers out of the business on the way..............not to mention putting all of their eggs in the SUV basket.....

[Dirty]

What is sinking American Auto workers and Airline industry are the Unions.... Retired workers are getting their retirement, Pro rated Salaries and Medical Benefits until they die. $3800 from Every car GM sells goes to pay off retired employees... Not to mention the markup they have to have to pay off current loans and employees.

Unions were a good thing but not now.. they are not needed with the labor laws in place.... They are a death knell... Retirees should not get both prorated salaries and Retirement funds... If a company is matching your retirement benefits then you should be made to choose it... Not both... Medical Insurance is a no brainer...they have to have it...



Ever wonder how Kia, honda, Toyota, et al can sell cars so much better and cheaper than the Americans? Because they are not hamstrung by Antiquated Union Deals that are bankrupting great businesses. They pay their employees salaries and wages on par with other American companies (GM, Ford, etc..) but they don't have the huge overhead... but istead of having to charge $40k for the Vehicle they can charge $28K and still have the same profit margin and make a huge profit...


NO CEO could ever run a company and make it profitable under these circumstances... When Delta went Bankrupt they had to ask the judge for relief of paying prorated Salaries just to get anywhere near the black... guess what.. he did (and it angered many) and Delta emerged from Bankruptcy in Record time (then gas prices went up), but getting out from under that massive debt is a must for these companies to be viable again.

I have some good family friends who have retired from GM and Ford when they had plants in ATL (shut them down because they are hemhorraging money) and they don't even touch their retirement...they live off their Prorated Salaries they get.. some get as high as 80% of their Salaries they had when they retired... for not doing a damn thing... they are retired in their early 50's and are making over $50k a year with their retirement just sitting there.... It is fucking highway robbery....

[cassiusclay]

i just don't see how gm can "buy" chrysler, i understand if cerebus buys them but gm, nfw.

[pvcpipe]

the would have to get a killer deal to buy an american made car. my 4runner has been the best car i've ever owned. 140k with regular maintenance and still runs like it did when i bought it 7 years ago. i feel like Toyota (or Lexus) has earned my business when I upgrade.

[The Devil]

A Friend Bought A New Impala A Few Weeks Ago......

A Huge Chevy Dealership.....

10 Salesmen And We Were The Only Customers...

Went Back A Week Later To Pick Up The Plates.......again.........no Customers...

Either People Aren't Buying Cars, Or They Aren't Buying Chevys..........

[cassiusclay]

american made cars are way over priced. it's a shame, they are dropping the ball, to many options and choices in a domestic vehicle.

i have friends who are execs at chrysler, ford and gm, they are all looking over their shoulder.

i don't think i would buy a domestic vehicle, sad to say.

[YeahBoyHowdy]

the would have to get a killer deal to buy an american made car. my 4runner has been the best car i've ever owned. 140k with regular maintenance and still runs like it did when i bought it 7 years ago. i feel like Toyota (or Lexus) has earned my business when I upgrade.

i work for a railroad, and we do a good bit of business in the automotive industry. i've spent a good bit of time looking at our automotive business of late. toyota is rapidly expanding in the u.s., and the way they approach their business (from a supply chain management point of view) is seen as one of the leaders in the industry. very much a quality product.