GM Chrysler merger?
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Chrissss
Viper Owner
Its gone from a merger talk to outright selling Chrysler to GM. Cerberus, the private equity firm who is also notorious for cutting costs, is offering to sell Chrysler to GM in exchange for full ownership of GMAC, which Cerberus owns most of. This would be a terrible move in my opinion for the quality of the Chrysler product. 
jimsmyth1
Viper Owner
guess i missed this story before. would definetly be the end of the viper if that takes place.
gts_2001
Enthusiast
Consider this:
An economist who's pretty savvy (a personal friend) in the financial workings of the auto business suggested that perhaps Cerberus and GM are "talking it up" to get investors interested in buying stock in anticipation of a merger or buyout. Not a bad idea especially for Cerberus since they (Cerberus) have not even touched the 5 billion loan guarantee from the feds. It could be a "win-win" for both corporations and investors. Time for "creativity"?
An economist who's pretty savvy (a personal friend) in the financial workings of the auto business suggested that perhaps Cerberus and GM are "talking it up" to get investors interested in buying stock in anticipation of a merger or buyout. Not a bad idea especially for Cerberus since they (Cerberus) have not even touched the 5 billion loan guarantee from the feds. It could be a "win-win" for both corporations and investors. Time for "creativity"?
Black Moon
Enthusiast
I heard that Toyota was looking at GM before they go bust. I hope GM doesn't buy CHY. They are having enough of their own problems.
Yah, GM and Ford stocks took a HUGE (>40% in a day) blast in their value.
Since Investors can be used as an excuse for raising the gas price 30-40% that may be what the rumor is all about (good point of view gts 2001).
I'm trying to imagine why a company taking a HUGE decrease in Value that is closing many plants would want to buy a company whose stocks values aren't decreasing enough to even bother to mention in the news. Why would a company that reported "not to be going bankrupt" even though it's announced that GM's in the 'toilet' want to buy an expensive company that's doing extremely well in comparison???
Shouldn't Cerebus be talking about buying GM while it's available as a Fire sale?
Just my opinion.
Ted
Since Investors can be used as an excuse for raising the gas price 30-40% that may be what the rumor is all about (good point of view gts 2001).
I'm trying to imagine why a company taking a HUGE decrease in Value that is closing many plants would want to buy a company whose stocks values aren't decreasing enough to even bother to mention in the news. Why would a company that reported "not to be going bankrupt" even though it's announced that GM's in the 'toilet' want to buy an expensive company that's doing extremely well in comparison???
Shouldn't Cerebus be talking about buying GM while it's available as a Fire sale?
Just my opinion.
Ted
BigJag
Enthusiast
Chrysler is in worse condition than GM. The reason you don't hear about Chrysler stock prices in the news is that Cerebus is a private equity firm and therefore there is no stock price.
Since stocks and actual values are no-comparable why is Chrysler in rough shape? If they have no stocks they obviously can't lose 40% of their assets (stock) because of "speculation". The company would actually have to lose money instead of some 'dick-heads' opinion being made realistic. Stuff like gas price speculation, 40% loss in a day, Enron makes me sick. If all you do is rip off a few hundred thousand old retired peoples retirement fund, but don't actually kill anyone you only get a couple years for stealing millions??? Guess how much of my ,money is invested in "supposed" stocks? The same amount I lost when Ford and GM lost 30 and 40% ... ZERO.
Ted
Ted
JKVIPER
Enthusiast
This merger makes absolutely no sense. GM just killed Oldsmobile. The last thing they need are three more brands. Dogde Competes directly with Chevy and Chrysler and Jeep compete with its' other brands. Plus, GM has no money to do this.
BigJag
Enthusiast
Stock price has no bearing on the financial statements or performance of the company. Stock price is generally speaking reflective of the company's earnings and perceived future earnings. The public owns GM and hence the market price of the stock. Since Chrysler is owned by a private company there is no stock price because the stock is not publicly traded. If Chrysler financial performance ***** it will certainly drive down the value that Cerebus can sell it for. Methods of valuing a company's worth is generally the same if it is a privately held or publicly held company.
SnakeBitten
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I really hope this is just to garner more interest in Chrysler as was mentioned because if this does happen it means the death of the Viper.....Hmmm unless Lutz gets a say in the matter.....On second thought they wouldnt keep the Corvette killer around.
ShadowLight
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It's an interesting thing to think about, especially trying to figure out how to market these competing vehicles against each other in the future.
K
Kaya
Guest
If this goes down in the current market, expect Chrysler to have a nominal value at best. I would not be surprised if Cerberus traded Chrysler and cash to get the rest of GMAC. Daimler is trying to sell its 20% ownership in Chrysler back to Cerberus. They have said in the recent past that they would not pay Cerberus to take it, but that could easily change. In the current auto market, Chrysler will not bring much. I expect that GM would really be pursuing Jeep and Dodge Truck as keepers. The rest could be eliminated over a few years as models run their life cycles, and the winners from GM's current line and Chrylser's could be kept on while the slow sellers would be dropped. There is probably a 100% chance that Uncle Sam will end up incurring the costs of pensions, etc. from the Big 3 in the next few years to give them some breathing room. No one wants to see any of the manufacturers fail, as the chain reaction to the economy would be devastating. Bankruptcy of one will guarantee the same for the others, as a post bankruptcy company will be able to shed plenty of its obligations, and potentially permit a competitive advantage over those still carrying pensions, health care, etc. for retirees. I could easily imagine some federal help for GM to acquire Chrysler if it needed it, as it seems everybody is collecting now. As for the Viper, it probably will be sold to someone else long before a merger could take place. Thanks.
One of the reasons GM wants Chrysler is because of it's funded pension plan. When the sale from Daimler occurred, it had to be fully funded for the transaction to be completed. I am sure GM would love to "fold" Chrysler's pension fund into their own. It would help GM's books in a big way.
As for the dealer networks...lets just say the word "Carnage" comes to mind.
The Cerebus guys have always been big players in the "paper" markets. With the approved US Bailout on the horizon, I am sure the boys at Cerebus see GMAC as the key to accessing all that new capital. They would just mark off the Chrysler deal as means to getting all of GMAC.
As for the dealer networks...lets just say the word "Carnage" comes to mind.
The Cerebus guys have always been big players in the "paper" markets. With the approved US Bailout on the horizon, I am sure the boys at Cerebus see GMAC as the key to accessing all that new capital. They would just mark off the Chrysler deal as means to getting all of GMAC.
I good friend of mine who owns many dealerships in a number of states, told me about 7 years ago, that the rumblings at that time and the direction of the auto indstry was to one where the big three are essentially going to be merged into one and when people go out, to buy a car, basically they will purchase them by country. (ie. Amercian, Asian, Italian, German, Indian, etc.) That will be the marketing strategy over here.
This could very well happen if GM and Chrysler merge (What stops Ford from merging with them once the presidence is set?) and if the US Government has to bail out a company just to survive, it will want a stake in it as well, which seems to be the current governmental approach to everything.
Funny that the end could result in American Motors Company (AMC) as one US entity. Who would have pictured that one?
This could very well happen if GM and Chrysler merge (What stops Ford from merging with them once the presidence is set?) and if the US Government has to bail out a company just to survive, it will want a stake in it as well, which seems to be the current governmental approach to everything.
Funny that the end could result in American Motors Company (AMC) as one US entity. Who would have pictured that one?
Kenneth Krieger
Viper Owner
The blind leading the blind.......sorry......but that's the way it seems........I wouldn't worry about the Viper......they will sell Viper seperately.......
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