The End of Chrysler...
#22
#23
I don't understand how a company can buy the company for less then 11 billion, and get 11 billion in cash with the deal as well. I know there is reasons for it, but to a normal person it sounds like getting a company for free.
Me "I'll buy this house from you for $200,000 if one of the rooms in it contains $250,000 in cash." Seller "OK!"
Me "I'll buy this house from you for $200,000 if one of the rooms in it contains $250,000 in cash." Seller "OK!"
Last edited by Knight; 10/21/08 at 10:56 AM.
#24
I think GM buying Chrysler will sink GM even faster than they're sinking now. I worked for a company once that tried this. Just shoveling through the power struggles within management will take the better part of a year or maybe more. My company sank like a rock to the bottom once it was combined.
#25
I don't understand how a company can buy the company for less then 11 billion, and get 11 billion in cash with the deal as well. I know there is reasons for it, but to a normal person it sounds like getting a company for free.
Me "I'll buy this house from you for $200,000 if one of the rooms in it contains $250,000 in cash." Seller "OK!"
Me "I'll buy this house from you for $200,000 if one of the rooms in it contains $250,000 in cash." Seller "OK!"
basically its just saving time... at least I think it is. thats how it sounds in the Arin brain
#26
How about you slowly and methodically tear the house apart selling the pieces (assets) as you go. First you pull out the kitchen sink and sell it on ebay. Then you pull out the bath tub and sell it on ebay. Finally you sell the lot the house sat on and you have recouped your investment and yet you still get to keep the cash. In theory it works, I don't know if this is GM's intention because I have no idea what the requirements for the Chrysler employees pension plan would be. They would probably renegotiate huge cuts and concessions blaming tough times for the auto industry and then go ahead and bust it up anyway. Or even better for GM offload Chrylser's pension on the US taxpayer much like airline companies have done.
The problem is if it was really worth cannibalizing the equity firm that holds it would have done it already.
The problem is if it was really worth cannibalizing the equity firm that holds it would have done it already.
Last edited by 2k7gtcs; 10/21/08 at 03:00 PM.
#27
I think GM buying Chrysler will sink GM even faster than they're sinking now. I worked for a company once that tried this. Just shoveling through the power struggles within management will take the better part of a year or maybe more. My company sank like a rock to the bottom once it was combined.
#31
I don't understand how a company can buy the company for less then 11 billion, and get 11 billion in cash with the deal as well. I know there is reasons for it, but to a normal person it sounds like getting a company for free.
Me "I'll buy this house from you for $200,000 if one of the rooms in it contains $250,000 in cash." Seller "OK!"
Me "I'll buy this house from you for $200,000 if one of the rooms in it contains $250,000 in cash." Seller "OK!"
#32
Thread Starter
Closet American
Joined: July 17, 2005
Posts: 5,848
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From: Vancouver, BC (Hollywood North)
This makes sense to me, too, except that I must assume GM and Chrysler would be well aware of this, and that other factors come into consideration. And, again, with Cerberus owning 51% of GM, they may be foisting Chrysler upon the General ... with the General likely to dissolve everything but Jeep, gain some tax leverage, and be in a better position to seek valuable concessions from the government.
#35
In the end, it's all about profit. Unfortunately, stripping Chrysler and keeping Jeep probably makes the most business sense.
#36
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Serbian Steamer
Serbian Steamer
Joined: January 30, 2004
Posts: 12,637
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From: Wisconsin / Serbia
Yeah, but Renault didn't had Carlos Ghosn back then.
He managed to turn Nissan, after Renault bought them, from a point where they were ready to file for bankruptcy to a point when they made a profit in just 1 year.
He managed to turn Nissan, after Renault bought them, from a point where they were ready to file for bankruptcy to a point when they made a profit in just 1 year.
#37
This makes sense to me, too, except that I must assume GM and Chrysler would be well aware of this, and that other factors come into consideration. And, again, with Cerberus owning 51% of GM, they may be foisting Chrysler upon the General ... with the General likely to dissolve everything but Jeep, gain some tax leverage, and be in a better position to seek valuable concessions from the government.
#38
This merger tells us a lot about the shape GM is in. Cerberus is dangling the 11 billion dollars that goes with Chrysler like a carrot, and despite the fact that taking on Chrysler is going to make every problematic logistical issue at the General even worse GM is so cash strapped that they just don't care. It looks like GM has resorted to simply gritting their teeth, closing their eyes, and squeezing the trigger on this deal despite what common sense is telling them because they can't come up with a better answer. Perhaps they are hoping that somehow they can manage something so miraculous with that 11 billion dollars that they can dodge (no pun intended) the bullet pulling the trigger on this deal is going to let loose.
That is desperation pure and simple, and says a lot about how close bankruptcy is for GM. Even more tragic, under decent management Chrysler represents a much easier and cheaper fix than GM does since they lack GM's rather severe brand redundancy problem and aren't quite as desperate for cash. Alas, it looks like GM's final major foray into stupidity may be making certain that they don't ride into that dry, dusty sunset alone. What a bunch of ***holes.
That is desperation pure and simple, and says a lot about how close bankruptcy is for GM. Even more tragic, under decent management Chrysler represents a much easier and cheaper fix than GM does since they lack GM's rather severe brand redundancy problem and aren't quite as desperate for cash. Alas, it looks like GM's final major foray into stupidity may be making certain that they don't ride into that dry, dusty sunset alone. What a bunch of ***holes.