What does the [ret] stand for?

The liabilities are an issue, to be sure, but adding the government into the mix has also repriced the deal. Now that Washington has its checkbook in hand, everyone is waiting to see how much that they can get.

If Cerberus had no way out, they would make other plans. That would probably involve a Chapter 7, but not before assets were sold off to others who would pay for them.

Nissan is clearly motivated to tap into the Dodge truck line and VW has reasons to be interested, so both would be good candidates to get involved. It may not be politically appealing to sell Chrysler off to foreign companies, but it makes more sense on a lot of other levels. If the Canadians can cope with an American company owning Air Canada (yes, that would be Cerberus), then Americans should be able to cope with Europeans and Asians carving up Chrysler like a Thanksgiving turkey.

If they could have found a buyer they probably would have, but nobody would buy Chrysler with its current liabilities.

I agree with you regarding a Chrysler only Chapter 7, I just wish the government did.

I hope this ordeal is embarrassing enough to seriously effect their future business.

The $250B transportation spending bill from a few years ago included money for expanding zoos and building museums – not just the bridge to nowhere. The $700B bailout bill is even more ballsy – no attempt to cover up the giveaway that it is.

If you’re conservative, and you didn’t already loathe Bush, here’s another opportunity to wake up, get your red Mark-O marker, and cross the days off until 1/20/09.

It could cost them future business. That could give them tremendous incentive to step up with at least some cash, if but to preserve their reputation.

Until recently, Cerberus had a reputation for being one of the sharpest private equity firms in the business. GMAC and Cerberus are conspicuous, costly failures in the making and could push them over the edge. Investors will be plenty upset if their investments go from 60 to 0 just like that.

If I was the government, I’d play chicken with Chrysler. I suspect that if forced to the wall, Cerberus would hustle and find a buyer, so that they can minimize the amount of their infusion.

And if they do file a disorderly Chapter 7, they are too small to have much impact, anyway. It would be cheaper and more lucrative to support the major suppliers that are needed by the remaining players than it would be to throw cash into the Chrysler sinkhole.

Letting Chrysler go Chapter 7 would cost Cerberus nothing, so they have no incentive to put up a dime.

However, if Cerberus wants to try to split Chrysler automotive from Chrysler financial that is going to ding their limited liability.

Now that WOULD be poetic justice! They’d learn the meaning of “dont s–t where you eat” pretty fast!

Of course, this will all be compromised to death. All go-along-to-get-along. Maybe they split the difference – UAW keeps the gravy train until 2010. Maybe the Feds backstop the VEBA.

Maybe, and this is interesting, the UAW gives in now but they are allowed to organize the transplant shops. Everyone works for now at the new, lower, cost basis. When times get good again, the UAW will be able to twist the screws on the whole lot of them!

It would be interesting to see what the UAW would do if they actually owned a automaker.

Why give Cerberus a cent? The company has an incentive to cooperate, because their reputation with private equity investors is on the line. If they burn their investors with this deal, they could find getting new business a real tough slog.

Cerberus can earn back their losses on future business, and they know it. A bad economy is a perfect time for them to pick up new companies on the cheap, turn them around, and flip them when the economy recovers, so they have a lot to lose by hammering their investors here.

The situation here is not comparable to that of GM’s. Uncle Sam should take full advantage of that.

The solution is for the new Dem Congress and President BO to suspend the right to secret ballot voting on unionization of the transplants. Then strong arm tactics can be used to unionize these plants and the workforces can be made equally overpriced and crappy with lots of rules on who can and can’t work. This way it will not be necessary to cut the wages of UAW/CAW workers.

-That and the continued Appeal-To-Sympathy/Emotion Fallacies.

If Cerberus doesn’t want to pay the money back, I suggest the new administration march their dogs right up to 299 Park Avenue and freeze every asset and account Cerberus has across the entire world, until the $4B is disgorged.

Read that VF article I posted last time. Plenty of other hedgies are sucking it. So can Cerberus.

Sorry Robert the unions will eat it.Oh they won’t
like it,lots of kicking and screaming and rash statements.But in the end? The unions will accept
huge concessions.

Remember the VEBA plan,two tiered wages,how about American axle?Sure they made a lot of noise.
The memberships got to think that the union is fighting tooth and nail eh.The union took a 40%
cut at American Axle alone.

I know and the CAW/UAW leadership is painfully aware,that we are in a fight for our very survival.

To be kind, SOME of the membership/retirees don,t
quite get it …YET.

Gettlefinger and Lewenza will fire up the membership with lots of rhetoric.But pay attention boys and girls.With each press release,
and every speech,and with each new news bite.Watch and listen the unions will give up ground every time.

OH YEAH! We will accept the transplants wage and benifit package,but not without a lot of noise.

Mikey CAW [ret]