Re: GM-Chrysler Merger Talks to Intensify After Election
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Re: GM-Chrysler Merger Talks to Intensify After Election





Obama will not be negotiating anything all by his little ol' lonesome. No politician has just as no president has ever written a bill by himself, no matter how much he claims the bill is "his". Obama will meet with whomever with a room full of 'experts' in tow. Just as his campaign promises were formulated with assistance with the back room boys, so will any agreements he may be able to hammer out in the case of the American auto industry. So it matters not how much his experience is or is not. The backroom boys, though, that is another matter. Besides, look at the mess the "experts" created with the American auto industry. Maybe some "inexperience" might open some minds and doors. Including Obama's in the end.

The saddest part of this GM-Chrysler deal is that Chrysler is actually in better shape than GM. Last year GM lost over $38 billion and its October, 2008, sales are down 45% compared to last year. It is still #1 in the U.S. as Toyota sales fell 23%. GM is presently going through a billion dollars a month, an improvement of the average $3 billion last year. On the other hand, Chrysler sales are down 25% and the firm lost a little over a billion dollars in the first six months of 2008.

As to Chrysler's potential loss of 12,000 jobs, note the person being quoted has a personal interest in Chrysler. Thus no GM figures. GM is presently cutting back employees and closing plants, more than Chrysler has in the same period. Should GM acquire Chrysler, both GM and Chrysler employees and factories will be hit. The 12,000 Chrysler jobs lost will be but the tip of the iceburg.

There are people out there who say that Chrysler becoming a part of GM is best for the survival of Chrysler. I just cannot understand how some people wander through life with their eyes closed and their ears plugged. This "merger" will destroy both Chrysler and the American auto industry. As far as I am concerned, GM is a black hole when it comes to money. If this situation occurred fifty years, GM would be considering Chapter 11 proceedings.

Bill
Vancouver, BC


----- Original Message ----- From: "Bill" <Y1TopBanana73@xxxxxxxxx>
To: <mml@xxxxxxxxxxxxxx>; "62-65 Mopar List" <1962to1965mopars@xxxxxxxxxx>
Sent: Monday, November 03, 2008 5:19 AM
Subject: GM-Chrysler Merger Talks to Intensify After Election


And the hits just keep on coming...

General Motors Corp. merger talks with Chrysler LLC may intensify this
week as the companies wait to see whether the U.S. will provide
financial aid to help complete the deal, people familiar with the
matter said.

GM and Chrysler LLC owner Cerberus Capital Management LP still support
the combination, and discussions haven't stalled during government
negotiations, said the people, who asked not to be identified because
the negotiations are private.

GM and Chrysler, pressing for an agreement as a slumping economy and a
freeze on auto loans push industry sales toward a 15-year low, don't
expect to make significant progress on government aid until after the
U.S. election, the people said. Combining the companies would require
$10 billion to $12 billion in additional cash to mesh operations,
Citigroup Global Markets Inc.'s Itay Michaeli said in a note to
investors on Oct. 20.

Financing and a union agreement remain the two biggest hurdles for the
merger, people familiar with the talks said. The United Auto Workers
union has hired former GM adviser and Morgan Stanley auto analyst
Stephen Girsky to assist the union in the talks with GM, Girsky
confirmed in an e-mail.

Government loan guarantees might help stabilize the companies, Barack
Obama, the Democratic presidential nominee, said in an interview last
week on NBC's ``Nightly News With Brian Williams.'' Obama leads
Republican Senator John McCain by almost 7 percentage points in the
Real Clear Politics average of national polls.

Overhaul Plan

(and here's where everyone REALLY gets screwed if he wins)

Obama said he would meet with the chiefs of GM, Chrysler, Ford Motor
Co. and the United Auto Workers union to develop a plan for an
industry overhaul should he win the election, according to a
transcript released by NBC.

(the man has under 5 month of experience and he's going to "develop a
plan for an industry overhaul"?!?!?! GIMME A BREAK!!!)

Cerberus has favored an agreement with Detroit-based GM since the
talks started because it would enable the private equity firm to
reduce its exposure to manufacturing, people have said. Secondary
talks with Nissan Motor Co. about an alliance are on hold pending the
GM talks, the Detroit News reported Nov. 1, citing people familiar
with the talks.

(Cerebrus likes the GM option because it's the quickest way to dump Chrysler!!!0

General Motors rose 4.1 percent to the equivalent of $6.03 in German
trading as of 10:24 a.m. in Frankfurt. The stock dropped 14 percent
over the last two trading days in New York, extending the decline this
year to 77 percent.

GM, Cerberus and Auburn Hills, Michigan-based Chrysler have declined
to comment on their talks. GM has lost almost $70 billion since 2004,
while Chrysler, the third-largest U.S. automaker, indicated its
first-half loss exceeded $1.08 billion. Ford's deficits since 2005
total $23.9 billion.

Low-Interest Loans

Automakers including GM, the biggest in the U.S., are eligible for $25
billion in low-interest government loans to retool plants, while auto
lenders may get funding from the $700 U.S. billion bailout of the
banking system. The companies and their supporters want to speed plans
to dispense the money and ease rules on its use.

GM Chief Executive Officer Rick Wagoner has personally lobbied for aid
to help combine GM with Chrysler, people familiar with the discussions
have said.

GMAC LLC, which is 51 percent owned by Cerberus and 49 percent by GM,
has already succeeded in getting government assistance. The finance
unit was one of several companies that were granted access to the
Federal Reserve's new program designed to ease access to short-term
commercial paper.

GMAC said it is also seeking permission to become a bank holding
company to gain access to more of the federal funds.

Treasury Secretary Henry Paulson wants any funding for GM to come from
the low-interest loans that will be distributed by the Energy
Department, not the banking-system rescue, people familiar with the
matter have said. The Energy Department said last week it is still
writing rules for the loans.

`Parity' for Ford

Ford would expect ``parity'' should federal aid flow to a GM-Chrysler
tie-up, Executive Vice President Mark Fields told reporters Oct. 30 in
Dearborn, Michigan, where the company is based.

GM and Chrysler may also need a new agreement with the UAW for
union-run medical trusts before the money-losing automakers can
complete a merger, people familiar with the matter have said. The need
to negotiate such issues gives the union leverage over the outcome,
the people said.

UAW President Ron Gettelfinger said Oct. 14 in a Detroit radio
interview he wouldn't support a GM-Chrysler merger that eliminated
jobs, a result analysts have said is likely because the two companies
are losing market shares and may have to pare some of their 11 brands.

Accounting firm Grant Thornton predicted last week that 12,000 union
jobs at Chrysler may be eliminated by the merger.

(12,000 jobs @ Chrysler, huh? Imagine that...no talks of massive
firings @ GM though)

Bill M


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