I don't disagree with you at all.

But when are people gonna come to terms with excess capacity? Not just from GM/Chrysler but also from Ford in a shrinking market place?

The bonus for Ford is that they can just sit back and watch what happens... and if GM 'succeeds', Ford might still have the opportunity to slip into bed with GM at a later date?

 

Well where was everyone 6 months ago when I was saying that
GM will not be in business in 2009????????

Even if GM buys Chrysler,,,,,there will be many unemployed people.....
GM should be like a Toyota type of business,,,In my area there are HUNDREDS GM TYPE of dealers within a hours drive.(NYC,NJ and Philly areas}
But there are maybe a few Toyota car dealers within a hour from me.
Its too late for GM
Yep many say that they will be back to full life very soon.
Even if they sell 100,000 camaros will not help GM.
Too me I feel we might not see a Camaro in 2009.
I would hope see them before they go BK7 because I would like to own one.
Too me Ford will be here for many years to come...
Ford has many car dealerships,,,but I think they will trim many of them down...
As for GM well the news only gets worst each day.................
Its not that I hate GM,,,,I hate all car dealers because all of them used to try and sucker you into a car before the internet

 

Is it possible that Cerberus is forcing this on GM?
Could Cerberus do a hostile takeover of GM at this point? I mean, GM's stock is in the toilet. Even if Cerberus offered $2 more per share over street value, a lot of people would make a ton of money. And what's GM's market cap right now? I bet it's pretty low. And Cerberus said that they want to retain a stake in the merged company so that when the market comes back, they will essentially be in the cat bird's seat.

So instead of Cerberus doing a hostile takeover, they "convince" GM it's in their best interest for a merger.

Maybe GM is powerless at this point to fight anything like this.

 

One article:

http://www.reuters.com/article/compa...0081020?rpc=11
and another:


NEW YORK (Associated Press) - A potential deal for General Motors Corp. to acquire Chrysler LLC is slowly moving forward, but the transaction is being hampered by an inability to borrow the money needed to make it happen, according to a person involved in the financing discussions.

The person, who requested anonymity because the talks are private, said Monday it could be a couple of weeks before a deal is completed, if it goes that far.

The person also said the federal government may have to contribute money in order to make the deal work, although he was unsure if the government has been approached.

GM has been talking with Chrysler owner Cerberus Capital Management LP for at least a month about acquiring the struggling automaker, as Cerberus tries to exit the auto business and GM seeks Chrysler's cash stockpile of about $11 billion.

If the deal is consummated, GM likely would close factories, lay off thousands of workers and perhaps even close Chrysler's giant Auburn Hills, Mich., headquarters.

To do so, GM likely would need to borrow more money for severance packages and other restructuring costs. But that just isn't available right now for a company with a junk credit rating and liquidity concerns like GM, said John Atkins, a fixed-income analyst at IDEAGlobal.com.

If it could sell bonds, GM, would likely have to pay an excessive interest rate "north of 20 percent," Atkins said. "We're talking about a company that is well down the credit ladder."

Fitch Ratings reduced GM's credit rating one notch to "CCC" last month, and Standard & Poor's Rating Service has placed its "B-" rating of GM under review for possible downgrade. Both ratings are noninvestment, or junk, grade.

Atkins said Cerberus and GM likely are running out of options as the U.S. auto market continues its slump and both Chrysler and GM continue to burn up cash.

Analysts have said GM has little to gain strategically from taking on Chrysler, but Atkins said it may give the company leverage with bankers who are reluctant to make loans and to get more concessions from the United Auto Workers union.

The Wall Street Journal reported Monday that the companies were having trouble arranging financing.

On Friday, another person briefed on the negotiations said top executives of Cerberus and Chrysler had viewed the deal and asked for refinements.

In August, Chrysler said it had accumulated $11.7 billion in cash and marketable securities as of June 30. That figure remains around $11 billion, the same person said, even though Chrysler's U.S. sales are down 25 percent through September, the largest decline of any major automaker.

Detroit-based GM is burning up more than $1 billion per month, with several analysts predicting it will reach its minimum operating cash level of $14 billion sometime next year. GM's sales are down 18 percent, and the company has lost $57.5 billion in the past 18 months, although much of that comes from noncash tax accounting changes.

GM has pledged to raise $10 billion through cost cuts and another $5 billion through asset sales and borrowing as it tries to outlast a U.S. auto sales slump that could run into 2010.

Company spokeswoman Renee Rashid-Merem said GM is on track with the operational part of that plan.

Chrysler's money pile would help solve GM's cash problem if the credit markets remain inhospitable.

Both automakers have had to deny bankruptcy rumors in recent weeks, saying consumers won't buy cars from a company that looks like it could go out of business.

The deal being discussed calls for Cerberus to hand over Chrysler in exchange for GM's 49 percent stake in GMAC Financial Services. GM sold a 51 percent stake in its finance arm to Cerberus in 2006. Cerberus also would get an equity stake in GM, hoping to get a good return should GM recover when U.S. auto sales bounce back from a serious slump.

Other automakers, including the allied companies of Renault SA and Nissan Motor Co., also are in discussions about Chrysler, the person said. Simultaneously, Cerberus, which bought 80.1 percent of Chrysler from Daimler AG in a $7.4 billion deal last year, is negotiating to acquire Daimler's 19.9 percent stake.

All that GM, Chrysler and Cerberus have said about the negotiations is that automakers meet all the time. Chrysler Chief Executive Bob Nardelli said Thursday the auto sales drop has created an environment that favors consolidation.

 

A interesting take on this. True or not, what you suggest is how things can work in mega-big business.

 

Why do you continue to post this crap? The Camaro is already coming off the production line and orders are placed. We are going to see a Camaro in Feb of 2009, GM will still be operating then. The soonest they will go out of business, assuming everything stays the same, would be late 2009. So unless Camaro is suddenly pushed back (it isn't) or GM's cash burn accelerates significantly (possible I suppose, but unlikely the burn that much cash in the next 4 months), the Camaro will be hitting the showroom floors in Feb 2009 just as it is suppose to. So please do everyone a favor and can your anti-Camaro agenda.

As for the GM-Chrysler talks, I've seen a lot of interesting opinions in this thread. jg95z28 mentioned the idea of GM selling the Dodge truck division to Nissan, which seems like something they might do. How much money could GM get for the Dodge trucks if it sold them to Nissan, who is obviously in need of a good truck line? It's not as if the Titan was a real competitor in the American truck market (even Nissan admits that with its replacement with rebadged Dodges plan) or GM needing the Dodge trucks (they already have a line of full size trucks, what do they need another for). I don't know if any of the other Chrysler lines would be viable to sell and I think GM would most likely keep the minivans and Jeep.

I don't quite see this as some people here do, as the most horrible thing to happen since, well, ever, but if it comes down to GM or Chrysler going out of business, I'd rather see Chrysler go than GM. Just my personal opinion on the matter. But if it is done, GM needs to get in gear and really make everything work, instead of the same old inept management we've seen for the past decade.

 

So... Should we have been listening to Buickman all along here a few years ago instead of beating on him?

I don't post much, rather I lurk here constantly and his name keeps popping up in my head whenever I read stuff like this...

Thoughts?

 

Buickman isn't looking out for GM. He is looking out for himself. He doesn't know what sales conditions are outside of GM. His grand plan benefits dealers more than anything (the same dealers that vetoed getting the Holden Statesman as a Lucerne replacement for 2009/10). The same dealer body who went to GM and demanded the Pontiac G5 (and likely the G3).

He has worked within the screwed up dealer system and that is all. And his knowledge/experience base is Michigan of all places (could you think of a more skewed market segment than there?).

As I told him multiple times, he would be a great dealer rep. But he would NOT be good for GM in a corporate position. He has a personal vendetta against Rick Wagner and has no cooth.

His "The Plan" was snake oil and nothing else.

 

You make a lot of good points there...

One thing I have to ask though... The dealers are on the front lines and they know what customers want and they know what they can't provide. So, should'nt the dealer influence be stronger with desicion making on models?

I work in the machine tool trade selling high end CNC equipment and I know my lines listen very closely to what it is we see in the market place, what we want and can sell... sure it takes time to adapt but the product eventually comes.

I know that those are two different entities but I just have to question the thinking some time...

 

Now I'm reading that JP Morgan, who owns most of Chrysler's debt (approx 9-10 billion dollars) tried to offload that debt to other investors last year with no takers.
Could JP Morgan be telling Cerberus that they need to do something about Chrysler? Either punt it to another company or sell it off as parts. Or just declare bankruptcy.

It seems now that the financing part of the deal is going to be the tough part. Chrysler's debt is about 9 billion dollars. That amount either has to be paid off or restructured in the case of a sale or merger. And there's the cost of buying out Chrysler's employees. That's estimated to be about 4-5 billion dollars. GM's credit ratings are in the toilet, so they may not be able to raise the capital to complete the deal. So it looks like, at least from the outside, that about 14-15 billion dollars is needed to get this done. So Chrysler cash reserves would be wiped out if this were to happen and that STILL wouldn't be enough money.
Now they're talking about help from the feds to get this done. And it seems that the feds are not that opposed to the idea.

Are GM & Chrysler in that bad of shape? Is it a question of; "do we want one car company to go down or do we want two to go down"? Are we at that juncture right now? Is it really that bad?

 

I don't think dealers do know what customers want. Simply put they don't listen. They are there to sell not to find what fits the customer's needs. When was the last time you talked to a sales guy who actually knew his product well? Simply put they are few and far between. Most of the time a salesman is in the job for the short term, they don't learn models nor the major selling points of specific trim models.

Ideally they should have input but in reality they are just looking to make a sale. I am sure that even JasonE can agree that this is just how things work out most of the time.

 

GM cant get the financing to take over Chrysler and now VW is talking to Cerberus.

 

There are also articles I've been seeing say that VW may actually be eyeing GM.

However, it would make sense for VW to own the maker of their new "German Engineered" minivan...

 

VW has said they want to overtake Toyota in global sales within the next few years. This would be a pretty easy way of doing that.

 

Problem is, you have to deal with the UAW and CAW. Billions to buy out the employees, billions more to take care of retirees, and $9 billion to pay off JP Morgan. Even with $11 billion in the bank, any auto company would find it hard to merge/takeover/buy Chrysler in todays global economy.