RapidTransit
11-03-2008, 01:34 PM
KEITH CRAIN
Chrysler needs a buyer, but not GM
Keith Crain
Automotive News
November 3, 2008 - 12:01 am ET
Make no mistake; Cerberus is desperate to find a buyer for Chrysler. Cerberus is losing billions of dollars of its own and its clients' money and realizes that it cannot continue to do so.
At the same time, Cerberus is trying to figure out what to do with its 51 percent of GMAC Financial Services, which also has cost it billions of dollars and requires more capital every day. GMAC even wants to become a bank holding company to cash in on some of the $700 billion that Congress gave the administration to help bail out banks. Cerberus will take the money any way it can get it.
Meanwhile, for reasons that few outside General Motors can understand, GM is intent on buying Chrysler and taking it off Cerberus' hands. GM might even give away the rest of GMAC, which would compound the earlier mistake.
Unless GM gets a substantial amount of cash from the U.S. government — perhaps $75 billion or more — it will only be postponing the inevitable by buying Chrysler.
The number of people GM would have to fire, the plants it would have to close and the dealerships that would become redundant would eat through any bailout money from the government in a hurry.
If Cerberus had any interest in saving Chrysler, it would have made more sense to shop Chrysler in China. The private equity group was completely unsuccessful in trying to peddle the company in Europe so Cerberus fell back on good old GM.
I don't know whether Cerberus had any feelers in China. The Chinese have enough money — mostly ours — to support Chrysler for years while they take advantage of the assets.
It's a strange world. It was bad enough when Chrysler and GM worried about $4-a-gallon gasoline. Now gasoline is $2.50 a gallon, and we have traded that for a financial crisis and a recession/depression. Not a very good trade.
If Chrysler doesn't get help soon, it will begin to exude that terrible odor of finality. When that happens, there won't be anything that dealers or marketing people can do.
If Washington is going to give GM and Chrysler an influx of cash to try to save them, the government had better act quickly. Life support can last only so long, and both companies are in the intensive care unit.
Chrysler needs a buyer, but not GM
Keith Crain
Automotive News
November 3, 2008 - 12:01 am ET
Make no mistake; Cerberus is desperate to find a buyer for Chrysler. Cerberus is losing billions of dollars of its own and its clients' money and realizes that it cannot continue to do so.
At the same time, Cerberus is trying to figure out what to do with its 51 percent of GMAC Financial Services, which also has cost it billions of dollars and requires more capital every day. GMAC even wants to become a bank holding company to cash in on some of the $700 billion that Congress gave the administration to help bail out banks. Cerberus will take the money any way it can get it.
Meanwhile, for reasons that few outside General Motors can understand, GM is intent on buying Chrysler and taking it off Cerberus' hands. GM might even give away the rest of GMAC, which would compound the earlier mistake.
Unless GM gets a substantial amount of cash from the U.S. government — perhaps $75 billion or more — it will only be postponing the inevitable by buying Chrysler.
The number of people GM would have to fire, the plants it would have to close and the dealerships that would become redundant would eat through any bailout money from the government in a hurry.
If Cerberus had any interest in saving Chrysler, it would have made more sense to shop Chrysler in China. The private equity group was completely unsuccessful in trying to peddle the company in Europe so Cerberus fell back on good old GM.
I don't know whether Cerberus had any feelers in China. The Chinese have enough money — mostly ours — to support Chrysler for years while they take advantage of the assets.
It's a strange world. It was bad enough when Chrysler and GM worried about $4-a-gallon gasoline. Now gasoline is $2.50 a gallon, and we have traded that for a financial crisis and a recession/depression. Not a very good trade.
If Chrysler doesn't get help soon, it will begin to exude that terrible odor of finality. When that happens, there won't be anything that dealers or marketing people can do.
If Washington is going to give GM and Chrysler an influx of cash to try to save them, the government had better act quickly. Life support can last only so long, and both companies are in the intensive care unit.