Re: Re: Gm Chrysler Merger?

From: droo (03dakotacc4.7_4x4@comcast.net)
Date: Sun Apr 05 2009 - 16:46:25 EDT


On Sat, 11 Oct 2008 13:26:08 -0400, Ray Irons <rayirons@sbcglobal.net>
wrote:

>
> I don't know about that. From what I read in a snippet from the Wall
> Street Journal, Cerberus; which owns a little over 80% of Chrysler and
> 51% of GMAC, proposed trading Chrysler's automotive operations to GM in
> exchange for GM's remaining 49 percent stake in GMAC. This could be very
> attractive to GM as it would allow itself to shed the currently risky
> mortgage portion of its business while at the same time acquiring more
> manufacturing or eliminating a competiter. WSJ Sources also state that
> while the talks are currently stalled due to the financial crisis, they
> could resume once the markets settle down. They gone on to say the
> chances of a merger are about 50-50.
>
> My personal opinion is either way it sounds bad to me. GM wants to own
> Chrysler for whatever reason and Cerebus wants to dump it after just
> buying it from Daimler a little over a year ago.
>

Chrysler just doesn't make money. What could GM do differently to improve
that? They are already getting rid of their own employees and
manufacturing. Most of GM's current offerings are way off from what the
market wants. And the market has nearly evaporated. Between the inability
for a lot people to get credit and the slowing economy, the entire auto
industry is in some rough times ahead. I don't see how an automaker that
is in on the verge of bancruptcy could buy another automaker who has been
doing lousy for many years. How could GM assume all the debt let alone
find someone to lend them the money. Their bonds are in the toilet.

-- 
-droo

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