Cerberus wants to take over GM as well
Cerberus Capital Management LP would look to retain a “meaningful stake” in the company that would emerge from a combined Chrysler LLC and General Motors Corp., and would likely push to breathe “fresh air” into its top management, people familiar with the matter said.
GM and Cerberus, a private-equity firm that owns a majority stake in Chrysler, have been negotiating a potential marriage of the two ailing auto makers for several weeks. If a deal materializes, GM would be expected to lead the combined company.
But Cerberus and other investors who pump money in the new entity would want to keep significant equity and have the ability to appoint members to its board and influence its management, these people said.
Cerberus Looks for ‘Fresh Air’ at GM - wsj.com
October 24th, 2008 at 6:27 am
This article points up some of the reasons why Cerberus finds a GM-Chrysler deal attractive: (1) the $8 billion in cash that Chrysler has; and (2) the $10 billion in annual savings—that’s annual savings—by, among other things, the elimination of “40,000 jobs as they end overlap in areas like engineering and marketing. GM could use the more popular products at Chrysler,m such as its minivans, to replace less opylar GM versions.”
None of this makes it more palatable, especially to those who don’t value efficiency over every other value. Eliminating 40,000 jobs may be efficient as hell, but that doesn’t make it good for America. Nevertheless, this article help explain how the cow ate the cabbage on this merger talk.
October 24th, 2008 at 6:36 am
If Cerberus pulls this off, and some of the stock is sold to the public, the price ought to be so low that the regulars on this blog ought to be able to raise enough money from family and friends to control a big enough block to elect both Rich and Mopar Dealer to the board of directors. Cerberus would probably bitch, holler, scream and moan and make Rich swear on a stack of bibles that he wouldn’t lead a move to fire Nardelli and Press.
(PS, I’m available for free consultations on interiors of the remaining Chrysler products).
October 24th, 2008 at 7:47 am
That is clearly out of the box thinking DaveS:Real car guys sitting on the board of a major automobile manufacturer.
I’m all over not letting Nardelli or Prewss go I’d rather “F” with them till they quit.
I can push peoples buttons with the best of them.
The best part DaveS I’d know how to get this company fired up, I think I’d take the Patriotic approach and turn it into a contest, maybe a reality show!
Come on TV live with a score board, up date every night, us againist the imports, do profiles on employ jobs we are saving.
How about a score board for how many people we’d be putting back to work.
Because of your support America and your purchases of Chrysler product we were able to put 2,700 hard working Americans back to work this week.
Thank You and God Bless the American Worker.
It would work.
October 24th, 2008 at 8:15 am
This is old news. I think it’s also the reason that the entire board over at GM doesn’t really want this to go through. There’s only one guy at GM saying that this is the best idea since sliced bread. Wagoner and the rest of the board see the terms of the deal and know that they’d get the boot when it’s done.
October 24th, 2008 at 2:57 pm
Any such combination (be it GM-Chrysler, Chrysler-Nissan, Magna-Chrysler) is a guaranteed failure. Simple business history: the vast majority of mergers and acquisitions are failures. And it usually involves one strong (profitable) company absorbing a smaller, less profitable company. How on earth does any sane person think combining 2 huge losers will result in 1 winner? Ludicrous!
So let me get this right, a combination is supposed to be made profitable by cutting overhead, mainly unnecessary staff - in this case a LOT of redundant staff. So what exactly is keeping either GM or Chrysler from making such cuts as they are? What will change if they combine? Nothing!
October 25th, 2008 at 10:32 pm
For the past three decades the auto industry has cut jobs for more profit. Look at Chrysler once their were 215,000 workers, then the bankrupty happen elimnatiing jobs for larger profit and the selling off of sub component parts makers. This trend continues today now only 66,000 remain and the money still is not enough. Rich investors don’t buy anything the workers do and that group grows but with fewer places to find wages to purchase product. Every marketer of product in the world wants to sell in America the biggest disloyal group in the world. Germany, Japan, China, France, Italy, Mexico, have laws to protect their industry that feeds its governments. Not in the good old USA its all about me and how much will you pay me to screw over the unfortunate.
Sad part is that we all know it happens, and one person can’t change. Even when one tries we beat them down with our disloyal notions no on is honest or that caring it just a rouse.
Watching the growth of China and India lately I see where America once was a poor developing country in the twenties. Now China’s children learn english and regional slang, children have two names the second being english. They buy goods to be like us. Wonder when the disloyality will kick in and the greed take control.
October 25th, 2008 at 11:29 pm
Lurch - You are a wise man. When they start cutting the business instead of growing it, you know they are on the way out.
Is it any wonder America is in decline? But should we expect otherwise? People lack a moral foundation today. We no longer go to church. Given our “sex, drugs, and rock & roll” lifestyle today, should we expect any different? It is all about me. As we sew, we reap.
October 26th, 2008 at 1:26 pm
Well, I am again it. Cerberus can’t make a go of Chrysler-Dodge. What makes them think they could make a go of GM?
October 26th, 2008 at 1:58 pm
Yes sir, Ancil. This is Studebaker-Packard all over again. Too bad. Boys, we can’t let this deal go down. These combinations always fail. Misery loves company. It is clear that Curbrus has no idea what to do. They zero in on profits, but they should focus on making sells. They need to start thinking like one of the big three, not like last place among the top six. The answer to slowing car sells is not cuts, but increasing market shares. They need to buuild and sale, sale, sale the rigs that America wants. Cars like low-cost, dependable, Plymouths —good basic transportation. Why not bring back the slant 6? If that combinatin goes through, they will layoft even more workers. Just say no to job cuts. We need better paying jobs, not disgusting minimum wage jobs.
October 26th, 2008 at 4:39 pm
You tell ‘em Archie.