By Edward Niedermeyer
October 16, 2008
Fresh off his recent membership in TTAC’s Cassandra club, Daniel Howes of the Detroit News has gone back to spinning bad news into industry gameplans. His latest column extolls the virtues of a GM-Chrysler merger, while admitting that such a move would be disasterous for everyone except GM and Chrysler. “Seen from the viewpoint of blue-collar labor, white-collar employees, local governments, dealers, the state of Michigan and the industrial Midwest, just about anyone whose livelihood depends on the dubious survival of Chrysler would pay a dear price,” writes Howes of a possible GM absorption of Chrysler. But, from the narrow perspective of an industry suit, these myriad viewpoints are just so much firewood to be burnt at the altar of survival. And Howes is conveniently on hand to stack it up and pass the matches.
“In the near term, a fattened GM in the United States arguably could become ‘too big to fail,’ a cynically convenient achievement in today’s climate of political change, economic uncertainty and market intervention.” Not that Howes doesn’t have qualms about such a move. “There are all sorts of reasons why GM shouldn’t qualify for fed help: That its troubles are self-made, the legacy of decades of labor-management ineptitude; that its brands are destroyed, despite recent revival; and that its reach isn’t “systemic” in the way that big Wall Street banks and insurers are to the global financial system.” Yes, but? “There would be political gain in all this,” says Sean McAlinden, chief economist of the Center for Automotive Research in Ann Arbor, predicting an Obama win. “(The Democrats) could lose the entire congressional delegation in Ohio if they let GM and Chrysler die. A Democratic Congress and White House couldn’t possibly let them go down.” And just like that, the worst possible reasons for a merger (making GM “too big to fail”) are taking center stage. Awesome.
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POWERED
October 16th, 2008 at 11:59 am
American Leyland.
October 16th, 2008 at 12:05 pm
They will get a bailout and another and another etc and they will still fail. American Leyland is the perfect analogy
October 16th, 2008 at 12:14 pm
If there is any credibility to this looniness I want to propose a possible reason.
“The Artist Formerly…etc.” could once again claim to be the biggest for an hour or two.
Ego has cause crazier disasters, WWII comes to mind.
Bunter
October 16th, 2008 at 12:21 pm
“Gorilla Dust”
(from another poster in a previous thread, sorry I’ve forgotten your name)
October 16th, 2008 at 12:24 pm
For those too young to remember or so old they forgot (crediting Wiki):
“British Leyland was a vehicle manufacturing company formed in the United Kingdom in 1968 as British Leyland Motor Corporation Ltd (BLMC). It was partly nationalised in 1975 with the government creating a new holding company called British Leyland Ltd which became BL Ltd (later BL plc) in 1978. [1] [2] It incorporated much of the British owned motor vehicle industry, and held 40% of the UK car market,[3] with roots going back to 1895.
Despite containing profitable marques such as Jaguar, Rover and Land Rover, as well as the best selling Mini, British Leyland had a troubled history.[4] In 1986 it was renamed as the Rover Group, later to become MG Rover Group, which went bankrupt in 2005, bringing an end to mass car production by British owned manufacturers – with MG becoming part of Chinese Nanjing Automobile.”
October 16th, 2008 at 12:34 pm
netrun, I’m pretty sure it was Buickman.
October 16th, 2008 at 12:43 pm
Being too big to fail and securing Chrysler’s share of the bailout money seem to be the biggest upsides to such a merger.
There is also be some interesting product/brand/parts bin loot to be had from such a raid.
October 16th, 2008 at 1:44 pm
Just for kicks, let’s see some photochops of General Mopar….the Malavenger, the Calimaro, Ramarado, Durangahoe…..Vipette?
October 16th, 2008 at 3:43 pm
It was Buickman quoting Ross Perot back in 1991 about the way GM management operates.
http://www.thetruthaboutcars.com/between-the-lines-jalopniks-ray-wert-on-gm-chrysler-merger/
See the first response.
October 16th, 2008 at 4:06 pm
And how many dealerships would that be?
October 16th, 2008 at 4:10 pm
The Democrats will say too many (of our supporters) jobs will be lost if GM fails, but I don’t get why the Republicans don’t say, “Look, these companies are unable to make enough desirable products to invest taxpayer dollars to save”.
For GM to be saved, it’s got to go through Ch. 11. Is it really that hard to understand?
October 16th, 2008 at 4:34 pm
There is no actual need to preserve GM, other than its support network for existing product, which is sizable. The government will take this over, as well as its pension plan.
It is ridiculous to believe GM-Mopar would be too big to fail. The Titanic was “unsinkable”, too.
October 16th, 2008 at 5:34 pm
A Democratic Congress and White House couldn’t possibly let them go down.” And just like that, the worst possible reasons for a merger (making GM “too big to fail”) are taking center stage.
For what it’s worth, I’d say that political gain is one of the worst possible reasons for making anything happen.