Cerberus owns 51% of GMAC and GM owns the other 49%. Cerberus wants that 49%. Period.
On the other side of the equation, GM wants Chrysler's cash and the government money.
A GM-Chrysler deal would be an economic disaster for North America as a combined GM-Chrysler can keep all the Chrysler lines, transfer them all to unused GM plants, fire every single Chrysler employee, close all Chrysler factories, take all the government money, and continue on as if nothing happened. Probably into oblivion the way GM has been handling things this past 20 years.
As far as manpower and plant facilities are concerned, Chrysler is just excess baggage. Chrysler has the Jeep, the Dodge Caravan, the Dodge Ram (some say), and $11 billion in cash and marketable securities. That "marketable securities" places the true value of the $11 billion in question, IMHO. Everything else that Chrysler has is of no use to GM as they have too many factories, employees and dealers now.
Thus GM's acquistion of Chrysler will result in the single biggest employee layoff and plant closings the U.S. and Canada has ever seen. Add to that the layoffs and plant closures of Chrysler's suppliers. It will be the equivalent of Chrysler going bankrupt and will be enough to bring the economies of this continent to the brink of a depression, if not right into it. We are talking tens of thousands of people losing their jobs in one day.
If the Bush administration has nixed the GM-Chrysler deal, it marks one occassion they have got it right. And this is also proof that a car company (ie, Chrysler) needs to be run by people who know cars and not people with more money than brains (ie, Cerberus).
Bill Vancouver, BC----- Original Message ----- From: "Bill Maurits" <y1topbanana73@xxxxxxxxx>
To: <mml@xxxxxxxxxxxxxx>; "62-65 Mopar List" <1962to1965mopars@xxxxxxxxxx> Sent: Monday, November 03, 2008 5:05 AM Subject: Chrysler halts Renault-Nissan talks, favors GM
So much for my "good" news I posted going into the weekend...Cerberus are idiots! DETROIT (Reuters) - Talks on a deal to sell Chrysler LLC to Nissan Motor Co and Renault SA have halted because the No. 3 U.S. automaker's owner favors a deal with General Motors Corp, The Detroit News reported on Saturday. Citing sources familiar with the situation, the newspaper said no further talks have been scheduled between private equity firm Cerberus Capital Management LP CBS.UL, which sees a deal with No. 1 U.S. automaker GM as financially more advantageous and better for the struggling U.S. auto industry. In an earlier report, The Detroit News said the Nissan-Renault alliance had proposed buying 20 percent of Chrysler. A spokesman for Cerberus declined to comment. Earlier this week Nissan-Renault Chief Executive Carlos Ghosn dismissed reports of merger talks with Chrysler as speculation, adding that it did not make sense to risk cash in the current economic environment to form a strategic alliance. GM and Chrysler have been in talks on a possible merger, but according to sources any deal will have to wait until after the U.S. presidential elections on Nov 4 as the Bush administration ruled out providing government funding for it. Bill M _______________________________________________
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