GM Lacks Investors to Fund Chrysler Merger Deal
October 20th, 2008 1:07 PM Share
Today’s Wall Street Journal headline gets right to the point: GM doesn’t have the money to do the deal with Chrysler. As for sources, you have to believe either A) The WSJ’s making this shit up or B) the ongoing leaks are official and intentional (otherwise the leaker would have been found and stopped by now). Anyway, getting the tax payers on the hook is clearly a key element of the scheme: “It is still early days, but to make people feel more comfortable or to get investors to buy in, you have to think a government role would be important,” said one person involved in the talks. “That role could take a lot of forms, but it would be very important. The government may need to make it happen.” American Leyland indeed. Back in the day, the British government was the shotgun toting papa who pushed the kids to the altar and provided a dowry. GM’s COO Fritz Henderson is said to be the driving force for doing some kind of deal here. Considering the job ol’ Fritz has been doing leading the General’s charge up recovery hill, you have to wonder why anyone is listening to him. “Meaningful cost rationalizations” is the rationale of choice for the deal’s advocates on the GM side. But over at Cerberus the motivation is simpler; get anyone to take this fracker off our hands! How exactly they expect to get the government to put taxpayer money into a plan predicated on firing tens of thousands of people remains a bit of a mystery. Sanity may yet rule the day, but don’t count on it. Meanwhile, Nissan is said to be pursuing an alternative alliance strategy with Chrysler based on a cross-shareholding arrangement. If so, they must not understand the simple fact that Cerberus wants out, stat.
Published October 20th, 2008 11:25 AM
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4 of 14 comments
Neither. GM will in fact be going to Disney Land since it will now be a mickey mouse operation. T2
Is it even legal for companies to merge on the basis that it would make it easier for them to get government bailouts?
Obama is going to send us all a check for $4,000 and cut our taxes so that we will each have so much money to buy a new GM car with, they won't need government money. Ya right.
Why do they need to come up with funds? Isn't that what taxpayers are for, to hand automakers bailout after bailout? We can pay them out of our own earnings to buy Chrysler, just as we have been paying them with our earnings to continue to fail.