: GM wants Chrysler deal done soon, might not be able to get the cash



Blackout
10-21-08, 10:32 AM
http://www.autoblog.com/2008/10/21/gm-wants-chrysler-deal-done-soon-might-not-be-able-to-get-the-c/

Playdrv4me
10-21-08, 11:03 AM
Financing for what? This was supposed to be a trade. The plot thickens.

dkozloski
10-21-08, 12:47 PM
Financing for what? This was supposed to be a trade. The plot thickens.
No trade here. It's a merger. Cerebrus, a money changer who owns Chrysler, needs cash to get out of the deal. It would come closer to being a buyout of Chrysler by GM.

Playdrv4me
10-21-08, 06:10 PM
I thought it was supposed to be an exchange of the remaining 49% stake in GMAC for the Chrysler assets.

AMGoff
10-21-08, 11:14 PM
GM does not want this deal to happen... However, the three headed dog from hell has them by the balls.

Unloading a majority stake in GMAC to Cerberus is coming back to bite GM in the ass. It all comes down to the fact that the billionaire boys over at Cerberus bit off more than they could chew and got in way over their heads... So now they're looking get out as quickly as they can and they're using GM as their way out. How? They've essentially froze vehicle financing to GM through GMAC, beginning with raising the requirements for financing to a minimum of something like a 700+ credit score... which essentially disqualifies the majority of potential buyers who would have been able to previously finance through GMAC. I forget what the exact number was... but previously the average buyer had a credit score of something like 580-620 - so do the math. I've read a few other dubious things Cerberus is doing to basically extort GM. Needless to say, I've read that GM is actually pushing its dealers with possible incentives to find financing through institutions other than GMAC - a company they still hold 49% of... So GM is getting screwed on both ends!

Cerberus is essentially forcing this down GM's throat... and they're playing dirty to do so, because they have even greater incentives to do so. Why are they so adamant about getting the rest of GMAC? Because they're trying to cash in on the government bailout through all of the bad mortgage debts GMAC holds.

GM is in no position to be taking on Chrysler... It would have been bad enough had they just cut up Chrysler and sold the bits off to the highest bidders. But now instead of possibly losing one great American automaker, we're in jeopardy of possibly losing two.

Could this "merger" work? There's always a chance... but it would require GM having to make some drastic changes to its brand structure - which wouldn't be the worst thing in the world. They'd have to nix Hummer completely in lieu of Jeep... They'd have to think about cutting Pontiac in favor of Dodge... They'd have to kill one, if not two American truck brands... And unless they somehow figured out a way to fill Oldsmobile's old segment, Chrysler would essentially be lost for good.

It's not a pretty picture no matter which way one cuts it.