By Robert Farago
May 13, 2008
The problems at Chrysler are immense: lackluster products, development cutbacks, a hugely bloated dealer network, cash flow issues, you name it. And don't forget Chrysler Finance. Although the former cash cow is now behind the veil of private ownership, the lender is in deep doo-doo. Not as deep as GMAC's ResCap. If GMAC's mortgage unit goes down, it'll take GMAC with it, and, potentially, sink GM. Even if GMAC somehow makes it though this incipient recession, GM's supplier problems– including the unresolved strike at American Axle and the ongoing debacle at Delphi– are looking more and more like a Gordian knot making love to a black hole (thank you Jonny). In fact, taken as a whole, GM's problems are worse than they were in late 2005. Oh, did I mention that the window for Chrysler owners Cerberus to sue Daimler for fraudulent conveyance ends in early August? Folk, it’s getting ugly, and we're not even calculating Ford's woes or the simple fact that Detroit's manufacturing jobs are leaving the country. We will be here through these dog days. When the excrement hits the air re-circulation device, just remember: we told you so. And we will take no joy in what happens next.
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May 13th, 2008 at 12:28 pm
Exactly how much time do the Big Three have left? Are we talking six months or three or four years? Occam’s razor would say the reason for all the bankruptcy proof executive pensions is because of impending and inevitable bankruptcy.
If I remember correctly the British Labor party funneled cash to the remnants of Rover to delay their going into administration until after party elections… I wonder what Bush or Obama/McCain will do in that situation? Will we see similar shenanigans or will these once great but now moribund corporations be allowed to rest in peace?
May 13th, 2008 at 1:09 pm
“…a Gordian knot making love to a black hole.”
Anyone want to take a crack at photochopping that image?
May 13th, 2008 at 2:13 pm
C’mon now, GMs turnaround is right on schedule. I mean afterall, Rick Waggoneer’s said so, therefore it must be true.
May 13th, 2008 at 2:29 pm
““…a Gordian knot making love to a black hole.”
Anyone want to take a crack at photochopping that image?”
If The AA did it, I’d probably want to buy it. (even though photoshopping it may cause the collapse of the known universe).
May 13th, 2008 at 3:29 pm
I think a major event in the economy is all it is going to take to tumble GMAC or Chrysler Finance. The UAW will have a hand in this.
I don’t see how Chrysler could get government money to stay afloat because the other two are going to be standing there with hands out. That fact alone will keep them from acting on the impulse