G.M. and Chrysler Explore Merger

The New York Times ^ | October 10, 2008 | By BILL VLASIC and ANDREW ROSS SORKIN

[Azzurri]

DETROIT — General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.

The talks between G.M. and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were “50-50” as of Friday and would most likely still take weeks to work out.

A merger would be a historic event, with two of the most iconic names in American industry coming together to survive in an increasingly difficult environment. Both have roots dating back decades in Detroit and, with Ford, long dominated the auto industry — until Japanese and other foreign car makers began making inroads into the American market.

The auto industry is being pummeled from all sides — by high gas prices that have soured consumers on profitable S.U.V.’s, by a softening economy that has scared shoppers away from showrooms, and by tight credit that is making it difficult for willing buyers to obtain loans. Both G.M. and Chrysler have been struggling with product lineups that are out of sync with consumer demand for smaller, more fuel-efficient cars.=

[El Gato]

I know the issue with the Yoon-yuns, but, for the life of me, I can't see why the big three have had such a problem finding good managers. Changing strategy seemingly every quarter, putting billions into product development only to water such developments down in the execution phase, etc.

I see that sort of thing all the time. Among government project managers. And project managers of government contracts in private companies. Their idea of long term planning is two or three quarters out. They feel like they have to make their mark now, To hell with if what they are doing makes sense, at least they are doing, and are seen to be doing, SOMETHING. Of course they just sink whatever project they are on deeper into the muck and mire of bad management.

[Ken H]

The Vice Fund invests in companies, both domestic and foreign, engaged in the aerospace and defense industries, owners and operators of casinos and gaming facilities, manufacturers of gaming equipment such as slot machines, manufacturers of cigarettes and other tobacco products, and brewers, distillers, vintners and producers of other alcoholic beverages.

--vicefund.com

[Nathan Zachary]

The first car produced after Obama is President will be called the “KGB” K from the K car designs, G from GM, B from Barry Obama.
Obama will get rid of Ford altogether because the Ford truck was the America souths favorite.

The New KGB’s will feature 3 fabulous colors, one (black) reserved for government. Cardboard interior door panels, plain vinyl bench seats, formed cardboard dash, and a single round dial speedometer gauge. A 4 cyl. engine 33-1/3 hp, 4 speed standard tranny. Standard rounded corner box shape body, which will never change- ever.

[Nathan Zachary]

"GM should cut Pontiac, Buick, GMC, Saab and Saturn, and focus on its two best makes: Chevrolet and Cadillac."

Pontiac should be the survivor, not plain Jane and boring chevrolet. And I don't agree that GM is better than Dodge/Chrysler. At least they build performance an style and reliability, which GM hasn't done in decades.

[Constitution Day]

General Mopar.

[Nathan Zachary]

GM just got a $25 billion bail out as well. I thought it was supposed to be so they could sell 0% car loans. Guess they lied and paid union medical benefit demands instead.

Regardless, good riddance to America’s best example of union greed.

[Freedom_Is_Not_Free]

Let’s see...

Troubled company #1 with a money hemorrhaging problem joins with company #2 with a money hemorrhaging problem. And this is supposed to stop the money hemorrhaging ?

This is as stupid as Bernanke cutting the Fed Funds rate at a time when the Fed has lost ALL CONTROL over the actual rate of borrowing, over all borrowing, over all lending, etc...

UFB

[Freedom_Is_Not_Free]

To: Azzurri

Let’s see, take II, the Sequel...

Troubled company #1 with oversupply of Big Trucks joins with company #2 with oversupply of Big Trucks, and what, they make baby trucks? Shouldn’t both these companies be looking to merge with companies that specialize in building tiny fuel-efficient vehicles?

Does anybody else think the above perfectly fits Einstein’s definition of “insane”?

UFB

[martin_fierro]

[martin_fierro]

GMTA!

[bruinbirdman]

"Who cares?"

Well, Uncle Sam just guaranteed the Big Three (Cerberus is a private company) about a $25 billion line of credit at 2%, interest and principle payments postponed for 2 years. Maybe the taxpayers care.

.But then, either way, taxpayers will not see the $25B.

yitbos

[irishjuggler]

Pontiac should be the survivor, not plain Jane and boring chevrolet.

Let's see. Out of 9.37 million vehicles GM sold worldwide in 2007, 4,491,084 were Chevrolet-branded. And 485,885 were Pontiacs. So, you want to kill off GM's best-selling brand brand in favor of one that's selling nearly 90 percent fewer vehicles?

[norton]

"(would)...remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two."

It is already the Big Two:
Japan and "other".

[SunkenCiv]

also:

GM, Chrysler in merger talks: reports
AFP | Oct 10, 2008 | Unknown
Posted on 10/11/2008 3:48:25 AM PDT by decimon
http://www.freerepublic.com/focus/f-news/2103008/posts

[grellis]

If you would like to be added or dropped from the Michigan ping list, please freepmail me.

[RckyRaCoCo]

I thought Michigan voted against gay marriage?

[70th Division]

My opinion is that Chevy has carried GM for years. We have owned 7 Caviler es. They have always been good cars. If they would stop building limited market cars like the SSR they would have been better off.

I talked to Speilman the V.P. of North American operations in Sutton's Bay. He was driving one before they really hit the market. He showed me the car and I ask him if he thought he hit the market at 50K. He said Why of course. Well I never pay more for cars than I paid for my first house. I explained the PT cruiser to him. He said they were targeting a certain market. Now you know why they are in trouble.

[70th Division]

I have 175,00000 miles on my 7th Cavilere. Gets over 30 MPG. Now that is reliability. No problems by the way. It is like Obama and Bill Ayers. NO ONE KNOWS THAT SECRET!

[Tublecane]

“Well, Uncle Sam just guaranteed the Big Three (Cerberus is a private company) about a $25 billion line of credit at 2%, interest and principle payments postponed for 2 years. Maybe the taxpayers care.”

I care about the bailout, to be sure. About a merger? Not at all.