Bloomberg Backpedals for WSJ on Cerberus' Demand for GM CEO Rick Wagoner's Scalp
You see? That’s exactly the kind of trouble you get into when you rely entirely on unnamed sources, as Bloomberg, The Detroit News, The Detroit Free Press, The Wall Street journal, The New York Time and Automotive News (to name them all) have for the Chrysler – GM merger story. How can we tell the difference between refutation, reporting and rumor when all we’ve got is smoke and mirrors? Answer: we can’t. “Chrysler LLC owner Cerberus Capital Management LP isn’t seeking to remove General Motors Corp. leaders including Chief Executive Officer Rick Wagoner in a merger of the automakers, a person familiar with the talks said,” Bloomberg “reports.” Hang on; is this one of the same “people familiar with the matter” quoted by The Wall Street journal who claimed Cerberus wanted to disappear Red Ink Rick? F-bomb knows. Meanwhile, wait! There’s less! “Cerberus also wants a ‘meaningful” stake, not a majority, in a combined company, said the person, who asked not to be identified because the negotiations are private. It’s too early to say whether the New York-based buyout firm would have board representation, the person said.” Not to put too fine a point on it, the mainstream coverage of this story is like the Keystone Cops chasing the Three Stooges.
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Love the photo. (The movies, too.) We need old-fashioned law enforcement like that, not sneaky cameras.
FIRE WAGONER. He is a deadbeat.
Why would Cerberus want more exposure to the US auto industry? After they've completely blown it on Chrysler they want to invest money into GM and put their "dream team" in charge? The only rationale is that they want to get their (filthy) hands on the bailout money, but if there are bailout bucks flowing Cerberus is going to have to be out of the picture. I stand by my theory that everything reported about this merger is total BS. It is not gonna happen.
The desire for a minority stake suggests a sale of Chrysler, more so than a merger. It provides for the chance for a possible (but probably unexpected) earn out, but without too much commitment on Cerberus' part. I suspect that Cerberus' main motivation is to find a way to effectively exit while taking out as much cash with them as possible, understanding that they can't justify taking all of it out of the deal. They have grown tired of their brief foray into the auto manufacturing business, and would welcome a graceful exit if they can get it. They'll take a not-so-graceful one if that's all that they can get.