I am really surprised all 3 of these guys keep getting lumped together. They are 3 completely different situations:
1) Chrysler is private, and they coincidentally want exactly the same amount of money that cerberus paid for them. They are the least viable of the 3 by any measure. This is a no brainer – they die. Because they are such a small player at this stage the “ripple effects” would be the least threatening.

GM and Ford are private as well – only with the diference not being owned by one shareholder alone. But the shareholders of GM and Ford would have the same benefits like Cerberus, on a total scale at a larger amount.

Regarding the ripple effect – this thinking prevailed for Lehman Brothers as well. Do not underestimate the effects on Suppliers supplying also GM and Ford.

2) Ford doesn’t actually want any money. If anyone has tagged along because GM’s trouble has made free money available, it’s Ford, not Chrysler. They have viable plans with demonstrated results. I think they will decline to participate if the pound of flesh extracted in return is too great.

Due to the downturn in the market, Ford will have no chance to survive this without loans, even if they have a plan. Read their plan, and the sales assumptions for the US, and you will know ..

3) GM needs cash now if they have any chance of surviving. I think they will get $4B to make it through Jan, and then the next administration will keep them on life support until a forced reorg plan can be worked out.

I believe it it either 18bn now or nothing. it would look ridiculous if the Republican congress would at this stage approve 4 bn as a loan with the argument, that after 20 January Obama shall decide. No way.

Nardelli was FIRED from GE
Nardelli was FIRED from Home Depot and
Nardelli will be FIRED from Chrysler.

It took Rick over 10 years to wreck GM, Nardelli wrecked the Depot and Mopar in about 24 months.

Yes he is much more efficient then Rick…
He wrecks companies FAST…

As a CEO he sucks… wherever he lands after he leaves Chrysler… SHORT that company… you will make a MINT!

“It has to do with which company will more likely to be viable going forward, and that is based on future product plans, current sales and presence outside of the U.S.”

Well you still haven’t answered my question. Why does GM deserve a chance to live (to only die, imo) another day?

You can’t convince me or the entire North American consumer market that GM will more likely be viable going forward when they have NEVER, NEVER, NEVER (did I mention never?) gained market share in the last oh, 30 years. And I bet they made some interesting cars during that time too, but mostly forgettable ones.

As for overseas sales they have peaked. They are not going to grow anymore in China or Europe or Australia. Maybe South America or the Middle East, but that is not going to save their bacon. Chrysler has more potential upside in overseas markets. You know, that “growth” thing.

Look at it this way: at their current “market share burn rate”, in a few years (or months at the rate things are going) they will as small as Chrysler. Is it ok for them to go out of business then?

Look at this way; Chrysler because they are smaller, don’t have 8 self-competing brands, 1500 layers of inovation stifling management, and best of all, don’t have Rick Wagoner, is a better candidate for a turnaround proposition than GM.

It has nothing to do with history, or which company innovated more in the 1960s or 1990s. It has to do with which company will more likely to be viable going forward, and that is based on future product plans, current sales and presence outside of the U.S.

GM wins on all three, compared to Chrysler.

Chrysler has built a lot of interesting cars over the years. But so did Packard and Studebaker, and we know what ultimately happened to them…

Dr. No: Shelby is putting his own Suthern car-making constituents ahead of the national good. Is that not obvious?

And how are the bailout proponents doing anything different? They want to use taxpayer money to allow GM and Chrysler to continue business as usual (with no guarantee that these companies will not be begging for more within a year), and make sure that no UAW members lose their jobs or (the horror!) take a cut in benefits.

Sorry, but that sounds like a pretty parochial viewpoint to me.

The best answer is Mullaly but he is busy with Ford. Alan will get high marks from historians for changing Ford, it remains to be seen if Ford can withstand the new company formed by this shotgun marriage. With restructured debt, combined manufacturing and government backing CryGM will have advantages over Ford.

Unfortunately they won’t have better product. Ford products are better positioned and can beat the combined efforts of the other two.

1. Ford gets its line of credit right now.

2. GM gets a prepack that involves new management, slashing models, brands, dealers, UAW wages/benefits and retiree pensions/healthcare.

3. Chrylser is cast off to die(the idea of merging GM and Chrysler makes no sense – sure their are savings from the two existing companies, but no one NEED the third company in the first place).

This is as good as any summary of the hearing until Harry Reid comes out and says he has the votes to get something passed next week. From his comments yesterday, its no better than a 50-50 proposition.

(I say this in full knowledge of the untransparent way the banks are being supported).

Secondly, I appreciate these well-written, concise summaries. Thanks, Ed!

Shelby is putting his own Suthern car-making constituents ahead of the national good. Is that not obvious?

Cerberus should merge w/GM, as it seems silly to send money to a company that has a hard on for exiting the industry, particularly when Cerberus has the wherewithal to save itself. Nardelli made me weep crocodile tears when he was willing to sacrifice his job. What a complete ass!

And I don’t agree that Chrysler doesn’t have product today. It does. But it won’t be competitive in the future with its current track of cutting development R&D. It’s trading on past development efforts, and that margin is very thin as it stands today. I would hate to see C7 for Chrysler, but unless GM is willing to cut also-rans Saturn, Saab, Pontiac, Hummer and Buick, I don’t see GM having room for Chrysler. Buick could be spared given its popularity in China, but it too is a damaged brand in the U.S. Chrysler at least offers some diversity to offer GM, whereas the duplicity among GM’s existing line-up offers different shades of lipstick on a pig.

Can someone PLEASE tell me why a C/GM smashup would be such a bad thing at the right (equity only) price?

GM is a disaster in many ways…but imagine what they could do with Dodge replacing Pontiac and Jeep replacing Hummer.

The man was given Two hundred and ten million dollars to get the hell out of Home Depot. Nearly a quarter billion for screwing up and being forced to leave.

Let me write that out numerically: $210,000,000.00

Think about the lesson he’s learned: get in, f_ck up and get paid to leave. Can you imagine a sweeter deal than that? I can’t, not unless it involves the promise of eternal paradise.

Cerberus probably has contractual obligation to him that approach or exceed the Home Depot figure should he leave Chrysler prior to the nominal end of his contract. The man is already a multi-multi-millionaire. Falling on his sword is not exactly a hardship.

If there’s nothing else that proves that the American corporate oversight model is completely and utterly broken (and keep in mind, this is with examples like Enron, Tyco and Global Crossing) its that someone like Nardelli can be sh_tcanned, paid a quarter-billion and then hired again, only to run the ship full steam into the iceberg.

Amazing.

I’m occasionally tempted to believe Buickman’s insistent concerns about an Illuminati conspiracy.

Whichever one makes Cerberus the most money.

Somebody please fill in the X.

Unemployment benefits.
Pension benefit guarantee payments.
Lost income taxes.
Lost property taxes from foreclsed worker homes.
Lost future from their kids who dont go to college.
Lost everything from the ripple out across economy.
etc etc

Its like bailing out a criminal spouse. Costs maybe as much or more not to do it as do it.

Merge them. Kill Dodge, Chrysler, Saturn, Pontiac, GMC, sell Saab and Hummer. Give the Jeeps to the Hummer dealers and the minivans to Chevy. Fire everybody in Auburn and sell the plants to the Chinese. GM can sell Silverados to Nissan and minivans to VW.

That STILL leaves GM with a ton of work to do. They still would have separate cars for different regions of the world – duplicate wasteful engineering, too many dealers, factories, the Delphi mess, the VEBA to fund. They still would need all new managers to grind through the remaining mess. Oh, and a shit load of government money.

You make good points. This is just part of a bailout of the US economy; along with the financials and all the victims, fools and crooks who paid more for something than it was worth and/or they could afford. So calling it a bailout of the Big 3 is inaccurate.

The banks etc. with their ever worth less assets continue to need ever more, so why should the car companies be any different. But what nobody seems to be saying is that bailing out the Big 3 won’t do much if anything for the supply chain and dealers without moving some vehicles. The suppliers and dealers live or die on volume regardless of the propping up of the B3. And this is where the huge volume of jobs are.

I did not have an opportunity to watch this hearing, but I agree with Corker. If Cerberus is not willing to fund it’s own dying company why should the taxpayers? Chrysler should die, end of story. Sell Jeep quick!

Again: why should this be true only for Chrysler. Yes, there you have just the one big shareholder which you can identify. But many “capitalistic” shareholders at GM and Ford will be rewarded in the end the same way. If they are not willing to invest money in their company, why not let Ford or GM die? Same argument – but without the one face at which is is soooo easy to spit.

i also like how quickly nardelli was willing to jump ship given the opportunity.

Second, his claim about electric vehicles is also misleading. The ENVI vehicles are nothing more than electric go-karts on large body vehicles done for show. His electric vehicle division, GEM, makes what’s called NEVs, basically larger golf carts that are road legal below 35 mph. They do not meet all vehicle safety standards, and are intended only for college campuses, retirement communities, and other “contained” environments mostly.

Third, Cerberus does have the capital to rescue Chrysler if it wanted. But it wants out, and won’t commit more money under any circumstance. Nardelli seeks government money to keep the lights on and hopefully find a buyer. Frankly, the company should be liquidated.

Ford seems to be on the right track, and this was all set in motion BEFORE this whole bailout thing started.

GM, GM, GM… you were once a glorious company until you got greedy. Tisk tisk. Make it right. Fast. Oh, and fire Wagoner. He’s a financial drain even at a $1 salary.

UAW: You need to be part of the solution, not part of the problem any longer. Deep cuts, and fast… or you will be left with NOTHING if GM and Chrysler go under.

You are right, the bail out money should not come from Cerberus. It should come from the UAW workers, the dealers and the suppliers.

If those special interests are not willing to fork out the money then too bad.

Although there is a strong argument for letting Chrysler fail simply because, regardless of ownership, it has the weakest current lineup by far and no future products.