Cassandra Watch: Jerry Flint Edition
So much for editing on my iPhone. Anyway, again, it’s nice to see The Ascot-wearing one finally acknowledge the fact that the people running GM are clinically insane. In fact, Jerry Flint’s Road to Damascus moment is so powerful that it miraculously transforms the Forbes’ columnist’s prose into something altogether more readable than usual. “Let me make this clear: Any merger between General Motors and Chrysler would mean the death of Chrysler and another coffin nail for GM.” Crystal. But Jerry can’t just leave it at that. Oh no, he’s got to shoot down my theory: the Chrysler merger is a cash-grab to sustain GM and better position the artist formerly known as the world’s largest automaker for federal bailout bucks. In fact, Mr. Flint thinks the whole idea is… silly.
“The problem is that Chrysler is broke, too. It is practically impossible to find new vehicle programs in the works at Chrysler. A plan to build a new fuel-saving transmission has also collapsed. If Chrysler has any cash, it probably owes most of that money to suppliers and others. The idea that Cerberus, which plays hardball, would let GM escape with a significant amount of cash is silly.
“Another press story is that GM figures it has a better chance to get Federal aid if it adds Chrysler. How ridiculous! GM can win Federal aid–all it must do is ask. Its executives seem to be too proud to admit they have led the company into a disaster.” So, GM’s merging with Chrysler because The General’s execs are too proud to beg. Riiiiiight. [thanks to 1996MEdition for the link]
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Ok, I apparently missed the reference when they first started, but what is a Cassandra Watch for? What does it relate to? TIA.
I doubt that GMAC raised rates and restricted credit just to pressure GM. It has more to do with GMAC's inability to fund itself and hence resorted to the old banker trick of pricing itself out of the market instead of admitting to the nature of the real problem. High credit score paper (those at 720 FICO's and higher) can still be sold into the ABS market so that explains that. Reading his column at Forbes, I still don't follow the logic of a Renault/Nissan tie up. The best thing for Nissan is for Chrysler to disappear.
http://en.wikipedia.org/wiki/Cassandra_(metaphor) - The Cassandra metaphor (variously labelled the Cassandra 'syndrome', 'complex', 'phenomenon', 'predicament', 'dilemma', or 'curse'), is a term applied in situations in which valid warnings or concerns are dismissed or disbelieved.
Does this guy remind anyone else of Izzy Mandelbaum Jr.?