Is Kirk Kerkorian simply using Chrysler for his own “penny-stock” market manipulation? Back in the 1990’s he offered a LOT more money, and got turned down then. Now he is trying to get Chrysler for fire-sale prices.
And Kerkorian should get Chrysler for fire-sale prices.
In April of 1995, Kerkorian offered a 40% premium over the share price, an unsolicited bid of $55/share. The unions and management both harrumphed, carped, whined, sobbed and made a fuss about “a corporate raider” coming into the company.
I think Kerkorian was offering something like $22.8 billion total, and bought up over 10% of the company.
Now, 12 years later, the unions and management have conspired to drive Chrysler into the ground and Kerkorian is back — offering about $4.5 billion.
But wait — there’s more. Kerkorian sued Daimler, citing that Daimler’s top management wasn’t telling the truth about the takeover of Chrysler by Daimler. At first, the Germans were calling it a “merger of equals” and then later in interviews, Schrempp claimed that it was “never a merger of equals” but a takeover.
Here’s a bit of history:
http://money.cnn.com/2000/11/27/news/chrysler/
Taken together, the quartering of the offer and inflation, show just how much value has been lost in Chrysler since 1995. And there is no one to blame but management and the unions for this problem. It isn’t as tho Kerkorian has created these unsustainable liabilities on the cash flow of Chrysler.
The UAW had better get their heads out of their socialists behinds and realize that the US auto industry is on the cusp of having one of the Big Three simply disappear and have the remains cut up and sold off. GM isn’t going to buy Chrysler, and neither is Ford. Either Ford or Chrysler is going to fail and die if we keep the current structure and owners.
The only hope of keeping all Big Three around is to have private equity or raiders come in, cut the fat to the bone, streamline and re-assess the business by bringing in outsiders who don’t have friends in Detroit, don’t need friends in Detroit and aren’t seeking to make friends in Detroit. If a PE fund brings in guys who get death threats from the union thugs, you’ll know that the new owners are serious about saving the companies and they’ve brought in the right guys for the job.
As things stand now, it appears that Daimler has to sell Chrysler to pacify their own domestic German labor problems, and it appears that Ford might run out of time and money before they get things turned around. We might yet see a fire sale on two of the Big Three, not just one.