CNBC: GM Credit Downgraded...
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What's scary is that Toyota could buy GM OUTRIGHT right now, since they have a ton of money in their "war chest" cash reserves.
The best move would be for Ford and GM to talk about potential merger, then seek assistance from the government (as much as i would hate it). The unions should also get shot for this, since they basically sucked the life out of GM making them uncompetitive and are finally paying for it.
The best move would be for Ford and GM to talk about potential merger, then seek assistance from the government (as much as i would hate it). The unions should also get shot for this, since they basically sucked the life out of GM making them uncompetitive and are finally paying for it.
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Lexus Fanatic
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Ford and GM merging is like merging the Titanic with the Lusitania. The only way a merger works for either one of them is to merge with someone stronger. You put two wrecks together and all you get is one bigger wreck. Why Toyota would want GM is beyond me. What, they need all the bad publicity they would get from dumping the UAW? Not saying it couldn't happen. Warren Buffett has been making people bend over and spread 'em for the last few weeks to get a few bucks and walking away with deals that would make a loan shark blush but I think Toyota wouldn't find enough value to pursue.
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Ford and GM merging is like merging the Titanic with the Lusitania. The only way a merger works for either one of them is to merge with someone stronger. You put two wrecks together and all you get is one bigger wreck. Why Toyota would want GM is beyond me. What, they need all the bad publicity they would get from dumping the UAW? Not saying it couldn't happen. Warren Buffett has been making people bend over and spread 'em for the last few weeks to get a few bucks and walking away with deals that would make a loan shark blush but I think Toyota wouldn't find enough value to pursue.
I think consolidation in supplier, tooling, engineering, plants, etc. could make a Ford / GM merger work AND bring in public(sales), especially government(cash) "patriotic" support (which they desperately need). That is the last hope for them imho (and not some quasi "electric-except--when-battery-is-depleted" hybrid.).
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Toyco buying GM would be amazingly stupid as you said, but again the point is that they *could* readily buy them (and any other car mfg.) if they wanted too.
I think consolidation in supplier, tooling, engineering, plants, etc. could make a Ford / GM merger work AND bring in public(sales), especially government(cash) "patriotic" support (which they desperately need). That is the last hope for them imho (and not some quasi "electric-except--when-battery-is-depleted" hybrid.).
I think consolidation in supplier, tooling, engineering, plants, etc. could make a Ford / GM merger work AND bring in public(sales), especially government(cash) "patriotic" support (which they desperately need). That is the last hope for them imho (and not some quasi "electric-except--when-battery-is-depleted" hybrid.).
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btw> that lipstick reference cracked me up....way overused these days
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Lexus Fanatic
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I'm not necessarily condoning this action, but from a business perspective, with the massive amounts of money they are bleeding (and how large the company is in whole), it is unlikely a third party will swoop them up a la Cerebrus LLC and Chrysler. To continue independently, they would need an infusion of cash (last reports is that they need $15billion to continue with day to day business). Merging two vast global American institutions with huge constituents in employees, suppliers, and most of all, lobbyists and then hitting up the government as a way to save "their American way" seems like the only answer for the additional cashflow. You could parallel this with some of the Bank bailouts but of course it isn't at that macro level. This is just some random thoughts and i'm not trying to be argumentative, but has some merit as GM has already started inquiring the Feds about this (and was initially shot down)...
btw> that lipstick reference cracked me up....way overused these days
btw> that lipstick reference cracked me up....way overused these days
Pole Position
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The Feds are going to get involved big time, just too many jobs involved. But if you were in the private sector, you would be asking what is the potential return on what I pump into this company going forward. Regardless of the cash GM has left, they have been bleeding for quite a while now under Waggoner. Man, I don't want to see our domestic auto industry implode on our watch but fundamentally I have to have faith in their ability to be a competitive car company to justify public or private investment. And that is something I just don't have in abundance. Then again, I can't believe that the people running the airlines actually know anything about running airlines at present so what do I know?
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I guess GM was thinking along the same lines as myself!
October 12, 2008
G.M. Said to Seek Merger With Ford Before Chrysler
By BILL VLASIC
DETROIT — Before General Motors began exploring a possible merger with Chrysler — talks that first came to light on Friday — G. M. proposed a similar deal with its other cross-town rival, the Ford Motor Company, two people with knowledge of the talks said Saturday.
G. M. executives approached Ford about a possible merger in July, but Ford rejected the idea and ended the discussions last month, these people said.
After Ford decided to remain independent amid an increasingly difficult auto market, G. M. turned its attention to Chrysler. For the last month, it has been in preliminary merger talks with Chrysler’s owner, the private-equity firm Cerberus Capital Management.
People with knowledge of the talks described the chances of a deal as “50-50.”
The behind-the-scenes maneuvering illustrates the mounting pressure on the Big Three Detroit automakers to solve their enormous financial problems and stave off bankruptcy.
A G. M.-Chrysler merger, if it were to occur, would have a wide-ranging impact on the American auto industry at one of the most critical points in its history.
Both G. M. and Chrysler are losing market share in the United States and burning through billions of dollars in cash while they scramble to revamp their unprofitable North American operations. But they may be running out of time. With auto sales at their lowest level in 15 years, both companies face the possibility of bankruptcy before their turnaround efforts take hold.
“These are not normal times,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. “The biggest problem is cash and whether these companies will have enough to survive this downturn.”
For G. M., which lost $15.5 billion in the second quarter alone, the strategy for survival appears to center on pursuing a mega-merger.
In July, G. M. approached Ford with a proposal to combine the operations of the two biggest American automakers. The talks involved several meetings between G. M.’s chairman, Rick Wagoner; its president, Frederick Henderson; Ford’s executive chairman, William C. Ford Jr.; and its chief executive, Alan R. Mulally, people with knowledge of the process said.
Ford broke off the talks in September, these people said. Mr. Ford and Mr. Mulally were said to have concluded that their company had a better chance to reorganize on its own than in tandem with another automaker.
A Ford spokesman, Mark Truby, declined Saturday to confirm the discussions with G. M., but he said Ford was determined to remain independent.
“What we can say is that we are convinced our best opportunity is to continue to integrate Ford and leverage our global assets,” Mr. Truby said. “That remains Ford’s focus.”
Talks between G. M. and Cerberus may take weeks to complete, and they could still be derailed by price issues and the challenges of integrating G.M. and Chrysler. The companies have held numerous meetings involving senior management on both sides but have yet to delve deeply into each other’s financial books and sales projections.
Cerberus is also talking with other automakers about a potential Chrysler deal, including Nissan Motor of Japan and Renault of France, people with knowledge of the situation said.
Chrysler executives have already struck some deals on products and manufacturing plans with competitors, including a deal to provide a pickup truck to Nissan in exchange for Nissan building a small car for Chrysler.
A Chrysler spokeswoman, Lori McTavish, declined Saturday to discuss any merger talks with G. M. but reiterated the company’s strategy to grow through partnerships.
“As we have said, the company is looking at a number of potential global partnerships as it explores growth opportunities around the world,” Ms. McTavish said. “Beyond those partnerships already announced, however, Chrysler has not formed any new agreements and has no further announcements at this time.”
Chrysler has struggled in the United States market since Cerberus acquired an 80.1 percent stake in the company for $7.4 billion last year from its previous owner, Daimler of Germany.
Chrysler has cut thousands of jobs, slashed production and closed plants to try to balance the impact of a 25 percent drop in United States sales so far this year. But Chrysler has a substantial amount of cash, which probably would be of great interest to G. M.
As a privately held company, Chrysler is not required to disclose its financial results. In August, however, Cerberus said that Chrysler had about $11 billion in cash reserves.
The merger talks between G. M. and Chrysler are playing out against a backdrop of radical downsizing by all three Detroit automakers. Since 2006, the companies have cut a total of more than 100,000 hourly jobs in the United States, leaving them with about 130,000 blue-collar workers in their home market.
But the companies have also experienced significant erosion in their sales in the United States. Last year, G. M. sold 3.82 million vehicles, compared with 4.81 million five years earlier. During that same period, Ford’s sales have fallen to 2.5 million from 3.57 million, and Chrysler’s sales have dropped to 2.07 million from 2.2 million. By contrast, Toyota’s sales in the United States have grown to 2.62 million last year from 1.75 million in 2002.
G.M. Said to Seek Merger With Ford Before Chrysler
By BILL VLASIC
DETROIT — Before General Motors began exploring a possible merger with Chrysler — talks that first came to light on Friday — G. M. proposed a similar deal with its other cross-town rival, the Ford Motor Company, two people with knowledge of the talks said Saturday.
G. M. executives approached Ford about a possible merger in July, but Ford rejected the idea and ended the discussions last month, these people said.
After Ford decided to remain independent amid an increasingly difficult auto market, G. M. turned its attention to Chrysler. For the last month, it has been in preliminary merger talks with Chrysler’s owner, the private-equity firm Cerberus Capital Management.
People with knowledge of the talks described the chances of a deal as “50-50.”
The behind-the-scenes maneuvering illustrates the mounting pressure on the Big Three Detroit automakers to solve their enormous financial problems and stave off bankruptcy.
A G. M.-Chrysler merger, if it were to occur, would have a wide-ranging impact on the American auto industry at one of the most critical points in its history.
Both G. M. and Chrysler are losing market share in the United States and burning through billions of dollars in cash while they scramble to revamp their unprofitable North American operations. But they may be running out of time. With auto sales at their lowest level in 15 years, both companies face the possibility of bankruptcy before their turnaround efforts take hold.
“These are not normal times,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. “The biggest problem is cash and whether these companies will have enough to survive this downturn.”
For G. M., which lost $15.5 billion in the second quarter alone, the strategy for survival appears to center on pursuing a mega-merger.
In July, G. M. approached Ford with a proposal to combine the operations of the two biggest American automakers. The talks involved several meetings between G. M.’s chairman, Rick Wagoner; its president, Frederick Henderson; Ford’s executive chairman, William C. Ford Jr.; and its chief executive, Alan R. Mulally, people with knowledge of the process said.
Ford broke off the talks in September, these people said. Mr. Ford and Mr. Mulally were said to have concluded that their company had a better chance to reorganize on its own than in tandem with another automaker.
A Ford spokesman, Mark Truby, declined Saturday to confirm the discussions with G. M., but he said Ford was determined to remain independent.
“What we can say is that we are convinced our best opportunity is to continue to integrate Ford and leverage our global assets,” Mr. Truby said. “That remains Ford’s focus.”
Talks between G. M. and Cerberus may take weeks to complete, and they could still be derailed by price issues and the challenges of integrating G.M. and Chrysler. The companies have held numerous meetings involving senior management on both sides but have yet to delve deeply into each other’s financial books and sales projections.
Cerberus is also talking with other automakers about a potential Chrysler deal, including Nissan Motor of Japan and Renault of France, people with knowledge of the situation said.
Chrysler executives have already struck some deals on products and manufacturing plans with competitors, including a deal to provide a pickup truck to Nissan in exchange for Nissan building a small car for Chrysler.
A Chrysler spokeswoman, Lori McTavish, declined Saturday to discuss any merger talks with G. M. but reiterated the company’s strategy to grow through partnerships.
“As we have said, the company is looking at a number of potential global partnerships as it explores growth opportunities around the world,” Ms. McTavish said. “Beyond those partnerships already announced, however, Chrysler has not formed any new agreements and has no further announcements at this time.”
Chrysler has struggled in the United States market since Cerberus acquired an 80.1 percent stake in the company for $7.4 billion last year from its previous owner, Daimler of Germany.
Chrysler has cut thousands of jobs, slashed production and closed plants to try to balance the impact of a 25 percent drop in United States sales so far this year. But Chrysler has a substantial amount of cash, which probably would be of great interest to G. M.
As a privately held company, Chrysler is not required to disclose its financial results. In August, however, Cerberus said that Chrysler had about $11 billion in cash reserves.
The merger talks between G. M. and Chrysler are playing out against a backdrop of radical downsizing by all three Detroit automakers. Since 2006, the companies have cut a total of more than 100,000 hourly jobs in the United States, leaving them with about 130,000 blue-collar workers in their home market.
But the companies have also experienced significant erosion in their sales in the United States. Last year, G. M. sold 3.82 million vehicles, compared with 4.81 million five years earlier. During that same period, Ford’s sales have fallen to 2.5 million from 3.57 million, and Chrysler’s sales have dropped to 2.07 million from 2.2 million. By contrast, Toyota’s sales in the United States have grown to 2.62 million last year from 1.75 million in 2002.
Lexus Champion
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pushing on a string...
...just like the first Depression killed most of the automakers, Depression 2.0 will wipe out GM, only the strong survive, and GM shoudn't be building cars anymore.
I really tried to like their Kappa cars, 260hp turbo goodness. But reading how often they break down, nothing really has changed except the cars LOOK better. On my test drive of the Sky Redline the whole dash lighting went out, the car had 10 miles on it. Garbage in, garbage out. Why does the US Taxpayer have to keep proping them up with these rescue packages, I would never buy their crappy cars and I am offended my tax dollars make me support them anyway. Build more Toyota and Honda plants in the US and put all those good people to work.
...just like the first Depression killed most of the automakers, Depression 2.0 will wipe out GM, only the strong survive, and GM shoudn't be building cars anymore.
I really tried to like their Kappa cars, 260hp turbo goodness. But reading how often they break down, nothing really has changed except the cars LOOK better. On my test drive of the Sky Redline the whole dash lighting went out, the car had 10 miles on it. Garbage in, garbage out. Why does the US Taxpayer have to keep proping them up with these rescue packages, I would never buy their crappy cars and I am offended my tax dollars make me support them anyway. Build more Toyota and Honda plants in the US and put all those good people to work.
Last edited by toy4two; Oct 13, 2008 at 05:06 PM.
I like that name. Someone must have stole our idea today; there was a huge rally! I even got the date right! LOL
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It's interesting that while GM & Ford struggle, Volkswagen who employ probably the highest paid auto workers in the world is doing so well and is now worth more than Mercedes, BMW, GM, Ford, FIAT, PSA Peugeot Citroen, Renault, Mitsubishi and Hyundai combined:
http://www.ft.com/cms/s/0/1ce55bc6-9...077b07658.html
VW passes Toyota to top spot
By Richard Milne and Daniel Schäfer in London
Published: October 7 2008 19:09 | Last updated: October 7 2008 19:09
Volkswagen has overtaken Toyota as the world’s largest carmaker by market capitalisation after an extraordinary scramble by hedge funds to cover positions betting on a share price fall in the German company.
Volkswagen’s shares surged as much as 55 per cent on Tuesday, extending recent strong gains. However, the shares then succumbed to gravity in late trading to close 2 per cent down.
In spite of the late fall, VW is now worth more than Daimler, BMW, General Motors, Ford, Fiat, PSA Peugeot Citroën, Renault, Mitsubishi and Hyundai combined. VW has a market capitalisation of €94.5bn compared with Toyota’s Y12,792bn (€92bn).
By Richard Milne and Daniel Schäfer in London
Published: October 7 2008 19:09 | Last updated: October 7 2008 19:09
Volkswagen has overtaken Toyota as the world’s largest carmaker by market capitalisation after an extraordinary scramble by hedge funds to cover positions betting on a share price fall in the German company.
Volkswagen’s shares surged as much as 55 per cent on Tuesday, extending recent strong gains. However, the shares then succumbed to gravity in late trading to close 2 per cent down.
In spite of the late fall, VW is now worth more than Daimler, BMW, General Motors, Ford, Fiat, PSA Peugeot Citroën, Renault, Mitsubishi and Hyundai combined. VW has a market capitalisation of €94.5bn compared with Toyota’s Y12,792bn (€92bn).
It's interesting that while GM & Ford struggle, Volkswagen who employ probably the highest paid auto workers in the world is doing so well and is now worth more than Mercedes, BMW, GM, Ford, FIAT, PSA Peugeot Citroen, Renault, Mitsubishi and Hyundai combined:
http://www.ft.com/cms/s/0/1ce55bc6-9...077b07658.html
http://www.ft.com/cms/s/0/1ce55bc6-9...077b07658.html
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Lexus Fanatic
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I definitely do not want to get into the position of defending GM, Chrysler, or Ford, but I won't get down on them with the justification of how well the other auto makers are doing. Wait a few months and see how well everyone is doing. And if VW were so strong, they shouldn't have any trouble telling Porsche to kiss off.
As for the wisdom of first a GM-Ford merger and then a GM-Chrysler merger and then a GM-Ford-Chrysler three way, it might happen. At least the Feds can one stop shop with the bailout.
As for the wisdom of first a GM-Ford merger and then a GM-Chrysler merger and then a GM-Ford-Chrysler three way, it might happen. At least the Feds can one stop shop with the bailout.
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