Thread: Chrysler, GM discuss merger, acquisition

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Chrysler, GM discuss merger, acquisition



DETROIT - General Motors Corp. and Chrysler LLC have held preliminary talks about a merger or an acquisition of Chrysler by GM, according to published reports Saturday.


The Wall Street Journal, citing people it described as familiar with the discussions, said Cerberus Capital Management, the private equity firm that owns 80.1 percent of Chrysler and 51 percent of GMAC Financial Services, proposed trading Chrysler's automotive operations to GM. The Journal said Cerberus would receive GM's remaining 49 percent stake in GMAC.

The New York Times, also citing people familiar with the talks, said the automakers were discussing a merger. The Times did not mention GMAC, a traditional auto lender hit hard by the housing market downturn.

The talks have stalled because of the recent turmoil in the financial markets, according to the Journal. Its sources said negotiations could resume if markets stabilize because both GM and Cerberus want to quickly divest the assets under discussion.

The negotiations between 100-year-old GM and 83-year-old Chrysler began more than a month ago, according to the Times. Its sources said the chances of a merger were "50-50" as of Friday and likely would take weeks to complete.

Both newspapers posted their stories on their Web sites late Friday.

"Without referencing this specific rumor, as we've often said, GM officials routinely discuss issues of mutual interest with other automakers," GM spokesman Tony Cervone said.

"The company is looking at a number of potential global partnerships as it explores growth opportunities around the world," Chrysler spokeswoman Lori McTavish said. "Beyond those partnerships already announced however, Chrysler has not formed any new agreements and has no further announcements to make at this time."

Dodge Camaro?

PT Crumaro

Camaracuda. I can see it now!!! LOL

This has been boiling around in the trade papers for a while. Personnally the only thing that Chrysler has to offer GM is the Jeep nameplate and maybe some plant assets and foreign contracts. Many may have not noticed that during the financial market bailout wrangling just over a week ago a $25 billion loan authorization slipped through separately for "loan guarantees" to the US auto makers. With GM stock in the toilet because the market has no fundamental faith in the management team I wouldn't be surprised to see a Chapter 7 bankruptcy, the assets sold off for a song and a new company emerge from the ashes. Kiss the UAW/pension/and other costly agreements goodbye. Of course the pension stuff is backed up by our tax dollars so punch the cash register again! The other alternative given the foolishness we're permitting, and based on polls we seem determined to make even worse, "the government" would step in to support it's union masters and "save" the company...............afterall "it's too big too fail".

GMAC got itself in a pickle when it bought Ditech, the mortgage lender. The probable partial reason this deal is holding is they want to see what kind of program will result from the BIG bailout deal so they can figure out how to play the game. Instead of just letting failures fail we turn to a socialist central committee model that only prolongs the agony and constrict the healing that would naturally occur in a free market. We've learned nothing from the lessons of the 1930s!

This will shed some light on the subject

http://video.google.com/videoplay?do...05277695921912

Originally Posted by Bob Parmenter

This has been boiling around in the trade papers for a while. Personnally the only thing that Chrysler has to offer GM is the Jeep nameplate and maybe some plant assets and foreign contracts. Many may have not noticed that during the financial market bailout wrangling just over a week ago a $25 billion loan authorization slipped through separately for "loan guarantees" to the US auto makers. With GM stock in the toilet because the market has no fundamental faith in the management team I wouldn't be surprised to see a Chapter 7 bankruptcy, the assets sold off for a song and a new company emerge from the ashes. Kiss the UAW/pension/and other costly agreements goodbye. Of course the pension stuff is backed up by our tax dollars so punch the cash register again! The other alternative given the foolishness we're permitting, and based on polls we seem determined to make even worse, "the government" would step in to support it's union masters and "save" the company...............afterall "it's too big too fail".

GMAC got itself in a pickle when it bought Ditech, the mortgage lender. The probable partial reason this deal is holding is they want to see what kind of program will result from the BIG bailout deal so they can figure out how to play the game. Instead of just letting failures fail we turn to a socialist central committee model that only prolongs the agony and constrict the healing that would naturally occur in a free market. We've learned nothing from the lessons of the 1930s!

Again you've hit the nail on the head.... Some players in corporate America have become just like so many individuals... Waiting for the government to fix everything.....Welcome to Socialism.

Not trying to be a conspiracy theory guy, but I have to wonder just who or what has the money and power to pull off all this manipulating that is going on in the financial world?????? I guess we'll know when we see who's left standing when this is all over....

If I get greedy, make some foolish financial decisions, live on credit, and fail miserably nobody would come along to bail me out.....Why shouldn't businesses---or for that matter government entities---have to play by the same rules??? No company is too big to fail, well that's what I thought anyway... I guess with enough propping up and a large enough influx of cash they won't fail.

If a company can't supply a product or service and market it in a profitable manner then they are going to fail....why should it matter if it's a sole proprietorship company with no employees or a giant corporation???? We should all be held accountable for our decisions and actions, right????

I don't know, I don't understand any of it anymore. My vote is still going to "None of the Above".... I do know that I'm fed up with finger pointing and name calling. Negativity is not going to resolve the economic situation we're in now.

Hey! I'm going to lay back and let the government tax those darn rich people and give me everything I need!!!

I am worried no matter the outcome.

Congress has become disfunctional with the democratic "blockade".

We will end up with either a president with almost no experience of how to get anything done in Washington...

...or a Republican one that the democratic congress will nullify his every move.

I may just vote against every incument!

Alot has been said about this bailout or "buy out" as it be. Looks where the american car manufacures have gone to. Chrysler bought out, Ford near or is bankruptcy, GM stock have hit bottom and then they want to buy out Cyrsler?????. This country is run by greed alone and nothing else. Sure money is a great incentive and if I had some more I'd probably buy something I needed or not, but look at the ceo of companys and what they get as "bonuses"??? $6,000,000 because their company went down the drain. Come on. Where are we headed?????

Originally Posted by Dave Severson

Not trying to be a conspiracy theory guy, but I have to wonder just who or what has the money and power to pull off all this manipulating that is going on in the financial world?????? I guess we'll know when we see who's left standing when this is all over....

I tend not to believe in conspiracy theory as it is most often presented, it's any easy fall back for those who are prone to whining "I'm a victim, wah wah". I'm thinking here in the sense that most often it means a handful of powerful people gather around a table and hatch a plot, have a defined objective and an itemized "war plan" step by step.

That being said, I believe in a "conspiracy" (no meeting just a majority held understanding based on common experiences) of belief forming rules that play on human nature. A positive example would be traffic control. If we start from a correct observation that chaos would result if say a thousand drivers went out on the road without a set of rules that in most part are understood by all, and benefit all. Thus we end up with driving on the right hand side of the road, red means stop, person to the right has the right of way, etc. etc. Even though the rules are in place some people will ignore them or worse be allowed to be ignorant of them, and bad things can happen. But on occasion some drivers get away with breaking the rules and become emboldened to either keep braking that rule, til they pay a price, or even worse, break more of the rules in an unconscious attempt to see how much they can get away with.

Bazillions of books will be written going forward enumerating how we got to where we are in our financial markets. Some of them will be grossly wrong in their analysis, others will be accurate............but of couse the key to their value will be if anyone pays attention and acts accordingly. Unfortunately we're likely to end up with a government working largely from one perspective where the discenting voices will not be heard. Given the complexity of the matter we can't effectively cover all the contributing factors, but I would say the general consensus is that the subprime lending market was the 800 # gorilla that tipped the market scales. The simple matter of it is that no matter whether you think the intentions that led to a proliferation of subprime mortgages were good or not, the decision to "make housing affordable" in that way was a dumb idea. Common sense should dictate that lending money to people who haven't demonstrated a good history of being able to pay their bills is idiotic. Worse, allowing somebody to participate in borrowing money when they don't "have any skin in the game", is further idiocy. Now people who lend money commercially don't last long if they are idiots. Since this happened on such a wide scale, and was participated in by folks/businesses who had a history of not acting like idiots, the first thing we should do is ask ourselves what changed to cause these people/institutions to shoot themselves in the foot. The obvious answer (to me anyway) is, someone changed the rules. Just like, using the earlier example, if the highway rules were changed to make stopping at stop signs optional (some would argue that a certain level of anarchy has already resulted in that )we would eventually have total chaos as more and more people chose to play the game that way. In the case of subprime mortgages, rather than the rules being changed removing prudent "laws/regulations" (yeah I know some of you driven by your political party loyalties and in the tank media echo chambers think "deregulation" was the only cause ..............listen carfully, those who make that charge either don't give specifics about which regulations were undone, or the few that do point to the deregulation of banks in 1999. I would point out that that specific deregulation helped Wells Fargo, US Bank, B of A , and JP Morgan to withstand large subprime mortgages, whereas the investment banks not covered by that regulation are the ones that failed........but let's not let the truth get in the way of a good demogaguery)it was changing the rules to encourage lending to high risk borrowers that launched the torpedo. You might think that prudent lenders would resist such "encouragement", however, facing threats of lawsuits, judicial harrassment, further odious regulation, and other manner of political extortion many of them caved. In fact, they were not only urged to make weak loans, they were given goals. So, ask yourself what you would do if you were forced to do something that wasn't exactly in your best interest? The human nature thing is to try to make the most of it, remove as much of the pressure as you can, and pass the buck............or in this case, billions of bucks. So, as happened, you bundle the turd that was forcefully put in your pocket with the good stuff and sell the whole bundle hoping that the buyers will believe there's more than enough good stuff to make up for the bad. The second party in the transaction is motivated to do the same and moves it along. Of course, again these guys aren't normally idiots, they all knew there were turds in the pile, and the politicians who started the dominoe fall with the "affordable housing" measures/mandates, knew it too, so the politicians tweaked two government supported entities (GSEs) to offer a clearinghouse to take these turds off the commercial markets hands. HOORAY, bye bye risk (well, for the individual bundlers at step one anyway). So Fannie Mae, and Freddie Mac acted as a money laundering agency, and just like their Mafia equivalent they had to hide what they were doing. So we end up with political appointees like Franklyn Raines getting $90+million dollar bonus packages for running this scam and cooking the books.............and glory be he has some influencial and powerful congressmen running interference for him. Just to put a point on it, the hated Ken Lay, late of Enron and the human race, would have gone to prison had he not died, for doing the same thing. Do you think Raines will go to prison? Will we be consistent about enforcing our laws?

Are you incensed about a powerful congressman getting favorable loan terms that Joe six pack can't get from the biggest subprime loan maker, and is the leading receiver of campaign contributions from the above mentioned GSEs? If those aren't bribes from interested/benefiting parties, what are they? Will these political operatives ever pay a price for their contribution to this part of the market colapse? I don't think so since last week they were lauded as the "saviors", and are part of the "bailout" design. Many of you have been propagandized into believing that only businesses are evil, you say it on here over and over. While there are some who are (in reality a very, very small minority), you ignor those elected officials (and their appointee dupes) who wontanly manipulate the law to enhance their own power and wealth. Not only are we in a financial funk, but we who allow these criminals to be exempt from consequences are morally bankrupt as well.

You're right Jay, many of these crooked pols need to be fired, and as is so often true, government is not the answer for that...........we are!

Ack!?!?!?!?!?!?

This is my opinion, and it could be very wrong but it's what I think.

I think the CEO’s getting the severance packages of millions of dollars while the companies went out is bullshit, and the investor’s lost their money. The Ceo’s should leave empty handed. Why should they get to keep theirs? You go to Vegas lose a lot of money at black jack or any other table. You don’t get it back it’s lost as far as the casino’s are concerned. Take every dime, every house, car, anything of value, if they can’t be put in jail then at least put them on the street like everyone else that lost everything.
I really believe it is more profitable for some of the companies to go belly up and the big shots take their lump sump, and live happy ever after.

Richard

wow... at this rate the government should have their dirty little fingurs in everyones plates!

I think if any (none government) company manager broke the law in any way they should be tried and if convicted the share holders should have the right to do what's called a claw back, in other words recover as much of the payouts as possible that are a result of any proven fraud. I suspect that most citizens of this country aren't interested in that proving something criminal part. And IMO the government (absent a shareholder interest) deciding to take away any payment without benefit of proving illegal activities is dangerous if not outright wrong.

Serious question for those who would advocate attacking CEOs for perceived "Overpayment";
I don't follow sports much, but don't those guys on the NY Yankees make just a huge boatload of money for little overall benefit to our economy? And they aren't in the World Series, right? How come I don't hear about any lynch mob mentality toward those guys? (maybe I would if I lived in NYC)