GM/Chrysler Merger Update

[kennyhemi]

I think that the jury is still out. With the election of Obama can the Democrats afford to abandon the job needs of the UAW? I doubt it. I still think we are going to see them dust off the loan guarantee technique the government used to rescue Chrysler in the 80s; tweek it a little, and do the same thing now. Whatever they do, they have to do it so that there is not a series of cascading bankruptcies throughout the auto industry. People forget that there is a national security value to having the ability to ramp up the production of military vehicles if, and when, needed.

Here's the latest!

Bob Nardelli signed the following statement to Chrysler employees:

Today GM released their third quarter results which included the following statement, I wanted to share with you:

“In addition, we have recently explored the possibility of a strategic acquisition that we believed would generate significant cost reduction synergies and substantially strengthen our financial position in the medium and long term, while being neutral or modestly positive to cash flow even in the near term. While the acquisition could potentially have provided significant benefits, we have concluded that it is more important at the present time to focus on our immediate liquidity challenges, and, accordingly, we have set aside consideration of such a transaction as a near-term priority. We frequently discuss matters of mutual interest with other auto manufacturers and, as a matter of policy, we generally do not comment on these private discussions, which in many cases, do not lead anywhere.”

As we have previously stated, Chrysler LLC neither confirms nor discloses the nature of its private business meetings, as many times they do not come to fruition.

Returning Chrysler to profitability continues to be the key focus of the management team. We are significantly challenged by today’s economic environment and by the automotive industry’s unprecedented downturn. As an independent Company, we will continue to explore multiple strategic alliances or partnerships as we investigate growth opportunities around the world that would aid in our return to profitability.

As we’ve shared, we appreciated the opportunity to meet with Speaker Pelosi and her leadership team, as well as with Senate Majority Leader Reid to discuss the challenges facing the industry. We are encouraged by their understanding of the importance of the automotive industry to the economy and we look forward to working with them on these issues. We would also like to acknowledge that UAW President Ron Gettelfinger was present at these meetings and added his support.

 

[Mopar Boy]

Thank you Cerberus! Thank you thank you thank you!

Please also make the right decision regarding Viper!

Back to celebrating!!!


:


Robert

 

[gb66gth]

Keep the Viper alive!

 

[carmined]

"finish off America"---- bush took care of that

I understand, Southern California.

 

[carmined]

I agree. He damn near turned us into a 3rd world country after Clinton did so much good. It's a damn shame and thank god it is almost over.

Hate to burst your bubble but Clinton set the sub prime mortgage crisis in motion with his feel good policies.

 

[carmined]

Blame Bush? You are kidding, right? This guy has to be the worst president ever. Well, next to Carter, that is. Do you think it is a coincidence that the price of oil has plummeted right on time for the election??

The two oil tycoons in the White House have made a killing on the high price of oil, along with their buddies in Saudi Arabia. McCain's only chance was to lower the price of oil at the time of the election and fix the economy. They were able to do one but damaged the other too deeply to fix it in time. Bush should spend the rest of his life in prison for what he and his cronies have done to the american people.

Back to the topic; this merger is the result of crippled american car manufacturers, which is the direct result of poor sales. Are american cars inferior? I don't think so. We americans should stop buying foreign cars and do what is best for our own people (buy american cars).

Unbelievable.

 

[carmined]

Are american cars inferior? I don't think so. We americans should stop buying foreign cars and do what is best for our own people (buy american cars).

The stats beg to differ....[/QUOTE]

American car quality has risen and I know there are very good foreign cars out there but driving a foreign car is fashionable now. It is like driving a Cadillac in the 70's. I think that is more of a factor today than quality.

I don't think that is the only reason, of course some buy for the quality, but fashion is a big issue.

 

[carmined]

Yesterday I saw a front license plate holder with a picture of the American flag and the words: " These colors don't run." I told the owner that I liked his "tag" but wouldn't it be better if it was on one of the Big Three cars instead of a Kia. He looked confused for a second and then said: "Your right". There are millions like him.

About 52 percent

 

[carmined]

Yesterday I saw a front license plate holder with a picture of the American flag and the words: " These colors don't run." I told the owner that I liked his "tag" but wouldn't it be better if it was on one of the Big Three cars instead of a Kia. He looked confused for a second and then said: "Your right". There are millions like him.

About 52 percent.

 

[carmined]

This is so true, just look how you are treated as a customer of Honda or Toyota, the feeling is different when you first walk in the door. I find (we own a Honda), that the service departments are far more customer focused than I've experienced with American car dealerships. I know that is a generalization, but I think it holds.

As for quality, I think American manufacturers have vastly improved the quality of their products. However, it is not the reality of their quality that is the issue, it is the "perception" of continuing poor quality that is the issue. Changing perception is very difficult and takes a long time. Winning a few JD Powers awards for "initial quality" is not going to convince anyone.

I don't think any of this applies to Viper, I never view it as a real piece of Chrysler, in mentality or product.

Peter

I agree, every time I look at it and drive it, I can't believe it's a Dodge. Take it from me, I had a Plymouth Volare as a first car in 1979, slant 6, 4 speed. Wow.

 

[carmined]

I was told that the reason diesol was so expensive was it had to be refined to a higher level that 91 octane. It sold here in Calif for 5.50 a gal about .80 cents more than 91 0ctane. So now the price is just over the cost of regular gas 87 octane. below unleaded and way below 91 octane. So who is f---ing who here? Lies amd more lies. No point in asking for the truth. You won't find it within an oil company.

Gasoline is a more refined product than diesel or home heating oil.

 

[carmined]

I was under the impression that diesel was produced from the cracking process the higher octane at the top and the diesle at the bottom or near the bottom I heard that there is one lower grade fuel that needs to be preheated to flow. Mostly used on ships.
I am not sure that you can produce more or less in the refining process but, maybe someone can add some input to this. Diesel today down from $5.50 to 2.90 today. I do remember Chevron 102 octane at .35 Save American oil until the rest of the world is empty.

You won't live long enough to see the middle east run out of oil. If we don't drill here and stop worrying about trees and stupid animals, we will just transfer the rest of our wealth there.

Liberals, they love animals, can't stand people.

 

[Vipuronr]

American car quality, subject of many discussions....

As I said earlier, it is the perception partly, but the fact is how would someone really know and feel confident that a new American car is made better and will last. Perfect example is the new GM Acadia platform - Buick Enclave, Saturn Outlook and Chevy Traverse. Written up as excellent SUV's, but I spoke to a senior mechanic at one of the local dealers (in my FD) and he said they're "junk!" I quoted all the great ratings and he said it didn't matter, from an insider's view, they were junk.

So, should this be a more common belief among mechanics, how can the average American auto buyer believe that American cars are now better.

Issue: Do you plop down $45-$50k for a Honda Pilot, Acura MDX, Toyota Highlander...all of which are excellent SUV's or take a chance on spending the same money on one of the new GM SUVs?

I know this is a specific example, but it is one of many I assume.

Thoughts?

Thanks for listening.

Peter

 

[Vipuronr]

And, okay, its 7am on a Saturday....so, here's my (another) point of view on auto industry.

As the Gov't did with bailing out Chrysler years back (the Lee Iacocca deal), I belive that the Gov't today would bail out any of the big 3...especially GM being so large. Its overall impact on the US economy, because of the great number of industries auto manufacturing touches, would be incredible. The loss of jobs, should GM actually close down (not likely), would be felt in nearly every sector of US industry - raw materials like Petroleum, plastics/rubber, electronics, steel/other metals, plus all the sub-manufacturing businesses that provide parts to GM. The rippling effect on the overall economy from this large loss of jobs would be less buying at retail, causing the retail sector to slow down....resulting in additional loss of jobs, higher prices to cover lost sales and so on.......

This doesn't include the impact on the global economy, as GM sells cars nearly everywhere and has many manufacturing facilities outside the US.

So, my opinion, should the auto industry reach a breaking point, the US Gov't will have little choice but to jump in and help.

Peter

 

[GTSnake]

From the look of things the merger will not happen.... At least for now.

Let's keep our fingers crossed that it gets dropped.

 

[Alexarz]

Unbelievable.

Naive............

 

[Vipuronr]

Me?? Okay, please explain why I am naive...I'm interested in other points of view.

Thanks.

 

[Vipuronr]

On the merger, I think GM did not expect to burn their cash as quickly as they did, reducing their cash reserves more drastically.

Without sufficient cash, they can't buy/merge with Chrysler. However, it is my belief (as stated above), that if it is deemed the merger is necessary for the health of the US auto industry then the Gov't will eventually have to step in an help fund the merger...if that is what it takes.

 

[carmined]

Naive............

If you think one man or party has that much control over world prices, you really are.

 

[Vipuronr]

Maybe so, but I just picked up today's NY Times and it says:

"The rapidly deteriorating finances of General Motors are forcing the federal government to decide whether to bail out the largest American automaker or face the prospect that it might go bankrupt."

It goes on to say:

"But a bankruptcy by G.M. or any other automaker would have far-reaching consequences, given the millions of people employed by supplier companies, dealers and other small businesses that are dependent on the industry."

Naive...maybe or maybe not. I am not saying that it is one man who will save things (Obama), but that the impacts of a company the size of GM will clearly cause major problems for the US economy and, to a lesser extent (wherever GM has presence) the Global or at least specific country or region economies.

To say that this is not, at least, a possibility is to also be somewhat naive.

Just my opinion.

Peter

 

[Kevan]

...I had a Plymouth Volare as a first car in 1979, slant 6, 4 speed.

That's hot.
With rich Corinthian leather?

 

[chimazo]

You guys should be careful what you wish for - GM taking over would have at least kept things on our shores... Hyundai's turn now.

"On the same day that General Motors announced it would be discontinuing talks with Cerberus over a possible purchase of Chrysler, news hits by way of Reuters that a replacement suitor has sprung up. Wow, that didn't take long. The latest partner is none other than Hyundai, Korea's largest automaker. Not surprisingly, it's the Jeep brand that is again taking center stage according to these initial rumors. Everybody wants Jeep, it seems. If true, the possibility of breaking Chrysler's automotive operations into bits and pieces once again seems like a distinct possibility. What's more, after acknowledging that GM is abandoning talks of a "strategic acquisition," Chrysler's Bob Nardelli may now be back on the phone with Carlos Ghosn, head of the Nissan/Renault juggernaut, along with, presumably, anybody else who is willing to listen and has a pulse."

[Source: Reuters]

 

[Vipuronr]

Only if you plan to drive on Fantasy Island....but then, if its a fantasy existence, then OF COURSE Chrysler cars are top quality and last for years!!!!!

DISCLAIMER: Viper not included!! This statement has been approved by the FTC.

 

[Vipuronr]

I agree about keeping GM as an American owned company....but, it certainly is a distinct possibility as look at the new foreign purchase of Anhauser Busch....imagine...Budwiser, THE American Beer, now owned by a non-US company.

Hyundai...interesting, but I understand their interest in Jeep...a premier brand within Chrysler. Conversely, I see little interest in Viper by a company that primarily markets less expensive cars (though they are making efforts to become more affluent).

I think I would prefer Nissan, as they certainly have and have had significant interest in high performance/racing. Their new GT-R is a prime example and I could see them continuing the Viper brand and its development. This all assuming that Chrysler cannot be taken over by an American company.

 

[ViperTony]

It'd be a real shame if any of the big three get bought by foreign automakers. That's pretty much saying nobody here in the U.S. is competent enough NOT to run an auto manufacturer into the ground. Chrysler, being a private company, is the most likely of the big three to be sold overseas. I'd hope the government would step in and help before that would become a reality. Then again, its a catch-22: Giving more money the big three is like feeding a starved crack addict...it's a quick fix but the problems persist. Then again, do nothing and we'll witness the downfall of the US which we may never be able to recover from. If the government helped the airlines they MUST help the big three. Let's hope Obama understands this and does something about it soon.

 

[Vipuronr]

True. Now, without sounding like anti-union (which I am not), it has been widely publicized that the auto union contracts are contributors to the US manufacturers being less competitive. Now, before everyone starts throwing fruit and vegatables, I know there are lots of factors that have contributed...one prominent one of late is that even when a company loses millions or even billions, the Mgt team STILL gets huge bonuses and for departing top mgt of failing companies, they still walk away with hugh golden parachutes.

So, before the Federal Gov't just hands more money to the auto manufacturers, let them first fix some of the major contributing problems that led to this problem.

 

[Bobpantax]

In case some have not noticed, auto sales are down across all brands. Even Toyota and Honda are feeling the effects of the downturn. People are scared - very scared. When they are scared like this, they defer the purchase of big ticket items unless absolutely needed. For many, even if they do want to purchase, credit is either not available or not available at a cost that they can afford. As for leasing, it has hit a wall. Chrysler and GM ( I do not know about Ford as of now) stopped financing their own leases through their credit affiliates. It is all done through independent banks now. Those banks require high credit ratings.

 

[Vipuronr]

Yes, totally agree, it is across all auto manufacturers. We actually experienced the lease change when we went to look at a Toyota Hylander Hybrid...very difficult and the rates (money factor) seemed very high....so we passed on it. We're putting off purchase of new car because of the economy..just like everyone else.

Peter

 

[GTSnake]

It'd be a real shame if any of the big three get bought by foreign automakers. That's pretty much saying nobody here in the U.S. is competent enough NOT to run an auto manufacturer into the ground.

That's pretty funny Remember just a year ago the company was called "Daimler"Chrysler??? The last time I looked Daimler was a foreign company.

I'm very surprised Cerbrus hasn't been approached by any Chinese manufacturers yet. They've been trying to get established in the US market for a while now. With Chrysler's infrastructure it would be instant ***********.

 

[Lawrenzo]

I'm very surprised Cerbrus hasn't been approached by any Chinese manufacturers yet. They've been trying to get established in the US market for a while now. With Chrysler's infrastructure it would be instant ***********.

They are waiting for the price to drop by a few billion. They learned from our recent banking crisis that you should wait till the last minute and then swoop in for the spoils And they have the cash(our cash!) to do it.


The new 2010 Chery Viper- just doesn't have the same ring to it does it.