Posted by: David Kiley on November 03
Most of the news coverage and rhetoric about the government’s help of General Motors misses the point.
Take the “news” over the weekend as reported by Reuters and The New York Times. “The Treasury Department has turned down a request by General Motors for up to $10 billion to help finance the automaker’s possible merger with Chrysler, according to people close to the discussions.”
The idea that the White House would green-light $10 billion to help GM complete an acquisition of Chrysler was never in play.
Weeks ago, sources close to Rep. John Dingell (D-MI) and Senator Carl Levin (D-MI) said that a direct assistance for a merger of the two companies was a dog that was not going too hunt in the White House or in most of Congress.
When I caught up with Levin last week at a campaign stop, he made it clear that he was not seeking or pushing for assistance for GM to create a merger. If he isn’t pushing for it, then such a plan was not much in play. What Levin and Dingell have been pushing for is the speeded up release of funds from the Department of Energy, which is writing rules and conditions by which the automakers can apply for $25 billion in loans to off-set tech investments they have been making since January of 2008 and through next year to bring more fuel efficient vehicles to the marketplace. The lawmakers are also pushing for GMAC, Ford Credit and Chrysler Credit to be able to borrow from the Fedetral Reserve’s discount window like a bank in order to make more credit available to borrowers.
As Levin said: “These measures are not meant to assist GM in an acquisition of Chrysler, but if it has the effect of doing that, that’s another matter.”
Levin said one idea on the table, and presumably being boosted by him is allowing the automakers and suppliers to apply for loan money to cover retro-active investments—perhaps allowing GM and Ford to recoup money long since spent on hybrids and electrics. That would have the effect of a cash infusion to the companies that could help GM cover the costs associated with taking over Chrysler.
Under an expedited program with DOE, GM and Chrysler could apply for the loans separately, but pre-agree to pool the money to help a merger deal go through.
“The point is to get the automakers cash in the most politically acceptable way,” one Capitol Hill source told me. “And a direct payout to help a merger happen was a non-starter.”
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Monday, November 3, 2008
Great Business Week Article By David Kiley-GM-Chrysler News
Posted by: David Kiley on November 03
Most of the news coverage and rhetoric about the government’s help of General Motors misses the point.
Take the “news” over the weekend as reported by Reuters and The New York Times. “The Treasury Department has turned down a request by General Motors for up to $10 billion to help finance the automaker’s possible merger with Chrysler, according to people close to the discussions.”
The idea that the White House would green-light $10 billion to help GM complete an acquisition of Chrysler was never in play.
Weeks ago, sources close to Rep. John Dingell (D-MI) and Senator Carl Levin (D-MI) said that a direct assistance for a merger of the two companies was a dog that was not going too hunt in the White House or in most of Congress.
When I caught up with Levin last week at a campaign stop, he made it clear that he was not seeking or pushing for assistance for GM to create a merger. If he isn’t pushing for it, then such a plan was not much in play. What Levin and Dingell have been pushing for is the speeded up release of funds from the Department of Energy, which is writing rules and conditions by which the automakers can apply for $25 billion in loans to off-set tech investments they have been making since January of 2008 and through next year to bring more fuel efficient vehicles to the marketplace. The lawmakers are also pushing for GMAC, Ford Credit and Chrysler Credit to be able to borrow from the Fedetral Reserve’s discount window like a bank in order to make more credit available to borrowers.
As Levin said: “These measures are not meant to assist GM in an acquisition of Chrysler, but if it has the effect of doing that, that’s another matter.”
Levin said one idea on the table, and presumably being boosted by him is allowing the automakers and suppliers to apply for loan money to cover retro-active investments—perhaps allowing GM and Ford to recoup money long since spent on hybrids and electrics. That would have the effect of a cash infusion to the companies that could help GM cover the costs associated with taking over Chrysler.
Under an expedited program with DOE, GM and Chrysler could apply for the loans separately, but pre-agree to pool the money to help a merger deal go through.
“The point is to get the automakers cash in the most politically acceptable way,” one Capitol Hill source told me. “And a direct payout to help a merger happen was a non-starter.”
Stupid Daily News---Political Roast----Lingerie Football Pics
Most of the news coverage and rhetoric about the government’s help of General Motors misses the point.
Take the “news” over the weekend as reported by Reuters and The New York Times. “The Treasury Department has turned down a request by General Motors for up to $10 billion to help finance the automaker’s possible merger with Chrysler, according to people close to the discussions.”
The idea that the White House would green-light $10 billion to help GM complete an acquisition of Chrysler was never in play.
Weeks ago, sources close to Rep. John Dingell (D-MI) and Senator Carl Levin (D-MI) said that a direct assistance for a merger of the two companies was a dog that was not going too hunt in the White House or in most of Congress.
When I caught up with Levin last week at a campaign stop, he made it clear that he was not seeking or pushing for assistance for GM to create a merger. If he isn’t pushing for it, then such a plan was not much in play. What Levin and Dingell have been pushing for is the speeded up release of funds from the Department of Energy, which is writing rules and conditions by which the automakers can apply for $25 billion in loans to off-set tech investments they have been making since January of 2008 and through next year to bring more fuel efficient vehicles to the marketplace. The lawmakers are also pushing for GMAC, Ford Credit and Chrysler Credit to be able to borrow from the Fedetral Reserve’s discount window like a bank in order to make more credit available to borrowers.
As Levin said: “These measures are not meant to assist GM in an acquisition of Chrysler, but if it has the effect of doing that, that’s another matter.”
Levin said one idea on the table, and presumably being boosted by him is allowing the automakers and suppliers to apply for loan money to cover retro-active investments—perhaps allowing GM and Ford to recoup money long since spent on hybrids and electrics. That would have the effect of a cash infusion to the companies that could help GM cover the costs associated with taking over Chrysler.
Under an expedited program with DOE, GM and Chrysler could apply for the loans separately, but pre-agree to pool the money to help a merger deal go through.
“The point is to get the automakers cash in the most politically acceptable way,” one Capitol Hill source told me. “And a direct payout to help a merger happen was a non-starter.”
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General Motors denies asking Toyota for help
DETROIT (AFP) -- Struggling U.S. auto giant General Motors Corp. dismissed as "pure speculation" a report Wednesday that it had asked Japanese rival Toyota Motor Corp. for help to revive its business.
According to the report, GM sounded out Toyota on the possibility of GM chairman Rick Wagoner meeting with Toyota's leadership in Japan soon, but Toyota declined the offer, Japan's Kyodo News quoted unnamed sources as saying.
GM was believed to have asked for assistance including the purchase of its assets to help it raise cash, the report said.
GM spokesman Tom Wilkinson said the two companies held talks "on a regular basis" as part of their joint venture operating a manufacturing plant in California for the past 25 years.
Any suggestion GM and Toyota were preparing to expand their cooperation was "pure speculation," he said.
The Japanese automaker also denied it had been approached by GM, saying in a brief statement: "There's no truth in the report."
GM, which lost $15.5 billion in the second quarter, has shed tens of thousands of jobs in recent years.
Earlier Wednesday, GM reported its worldwide sales fell 11.4% in the third quarter from a year ago to 2.115 million vehicles, leaving the U.S. automaker behind Toyota as the industry leader.
The Detroit giant, struggling in the face of tough economic conditions in North America and fierce competition, remained behind Japanese-based Toyota, which reported sales of 2.236 million vehicles in the quarter.
GM, the longtime global leader, fell behind Toyota in the first quarter of 2008.
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General Motors denies asking Toyota for help
DETROIT (AFP) -- Struggling U.S. auto giant General Motors Corp. dismissed as "pure speculation" a report Wednesday that it had asked Japanese rival Toyota Motor Corp. for help to revive its business.
According to the report, GM sounded out Toyota on the possibility of GM chairman Rick Wagoner meeting with Toyota's leadership in Japan soon, but Toyota declined the offer, Japan's Kyodo News quoted unnamed sources as saying.
GM was believed to have asked for assistance including the purchase of its assets to help it raise cash, the report said.
GM spokesman Tom Wilkinson said the two companies held talks "on a regular basis" as part of their joint venture operating a manufacturing plant in California for the past 25 years.
Any suggestion GM and Toyota were preparing to expand their cooperation was "pure speculation," he said.
The Japanese automaker also denied it had been approached by GM, saying in a brief statement: "There's no truth in the report."
GM, which lost $15.5 billion in the second quarter, has shed tens of thousands of jobs in recent years.
Earlier Wednesday, GM reported its worldwide sales fell 11.4% in the third quarter from a year ago to 2.115 million vehicles, leaving the U.S. automaker behind Toyota as the industry leader.
The Detroit giant, struggling in the face of tough economic conditions in North America and fierce competition, remained behind Japanese-based Toyota, which reported sales of 2.236 million vehicles in the quarter.
GM, the longtime global leader, fell behind Toyota in the first quarter of 2008.
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Merger Halted? Massive Cuts maybe Coming To Save GM!
Well here we go again! Another wild week of hoping, praying and speculation.Will the employees of GM and Chrysler hear something this week?
The election is one day away and both candidates have agreed on meeting with The Big 3.
Just two weeks ago John McCain wanted nothing to do with the auto industry. Well i think that just may have something to do with Election, what great timing!
Trust me Plan A didn't work (Sell Chrysler to GM) and Plan B Didn't Work(Sell Chrysler to Nissan Renault) There is a Plan C (?)
This month of November General Motors will have record breaking job cuts and Chrysler will expedite it's already planned plant closings. There is no other option unless Federal money is involved.
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The election is one day away and both candidates have agreed on meeting with The Big 3.
Just two weeks ago John McCain wanted nothing to do with the auto industry. Well i think that just may have something to do with Election, what great timing!
Trust me Plan A didn't work (Sell Chrysler to GM) and Plan B Didn't Work(Sell Chrysler to Nissan Renault) There is a Plan C (?)
This month of November General Motors will have record breaking job cuts and Chrysler will expedite it's already planned plant closings. There is no other option unless Federal money is involved.
SFN-Odd News Feeds---Political Roast----Lingerie Football Pics
Merger Halted? Massive Cuts maybe Coming To Save GM!
Well here we go again! Another wild week of hoping, praying and speculation.Will the employees of GM and Chrysler hear something this week?
The election is one day away and both candidates have agreed on meeting with The Big 3.
Just two weeks ago John McCain wanted nothing to do with the auto industry. Well i think that just may have something to do with Election, what great timing!
Trust me Plan A didn't work (Sell Chrysler to GM) and Plan B Didn't Work(Sell Chrysler to Nissan Renault) There is a Plan C (?)
This month of November General Motors will have record breaking job cuts and Chrysler will expedite it's already planned plant closings. There is no other option unless Federal money is involved.
SFN-Odd News Feeds---Political Roast----Lingerie Football Pics
The election is one day away and both candidates have agreed on meeting with The Big 3.
Just two weeks ago John McCain wanted nothing to do with the auto industry. Well i think that just may have something to do with Election, what great timing!
Trust me Plan A didn't work (Sell Chrysler to GM) and Plan B Didn't Work(Sell Chrysler to Nissan Renault) There is a Plan C (?)
This month of November General Motors will have record breaking job cuts and Chrysler will expedite it's already planned plant closings. There is no other option unless Federal money is involved.
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Sunday, November 2, 2008
UAW hires Girsky as adviser on federal bailout, GM-Chrysler
The UAW has hired veteran Wall Street consultant Stephen Girsky to advise the union on automakers' federal bailout talks and a possible tie-up between General Motors and Chrysler LLC, Automotive News learned today.
Girsky, 46, is a former senior auto analyst with Morgan Stanley who became an adviser to GM CEO Rick Wagoner. He left GM in 2006 after less than a year.
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UAW hires Girsky as adviser on federal bailout, GM-Chrysler
The UAW has hired veteran Wall Street consultant Stephen Girsky to advise the union on automakers' federal bailout talks and a possible tie-up between General Motors and Chrysler LLC, Automotive News learned today.
Girsky, 46, is a former senior auto analyst with Morgan Stanley who became an adviser to GM CEO Rick Wagoner. He left GM in 2006 after less than a year.
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GM Needs Chrysler Now!
Is a deal already completed with General Motors and Chrysler?
The Detroit News reports that the talks between Chrysler and Nissan have been stopped.
All reports indicate Cerberus wants the complete sell-off of Chrysler LLC, it does not want to part it out.
So the only deal is the GM trade off with Cerberus for Chrysler, GM gets Chrysler and Cerberus get the majority of GMAC.
I would imagine Cerberus may keep a small stake in GM-Chrysler and GM keep a small stake in GMAC.
Another problem that needs to addressed is the German company Daimler owning 19.1% of Chrysler. Does GM pay them off? or are they figured into this massive deal?
However GM needs the cash from the Federal Government now to facilitate a deal and may get desperate in it's attempt to purchase Chrysler.
In the time it took me to update this blog, GM lost $440,000 Buckaroos!
GM is losing $1,000,000,000 a month, ruffly $32,000,000 a day!, $1,300,000 an hour, $22,000 a minute and $366.00 a second!
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GM Needs Chrysler Now!
Is a deal already completed with General Motors and Chrysler?
The Detroit News reports that the talks between Chrysler and Nissan have been stopped.
All reports indicate Cerberus wants the complete sell-off of Chrysler LLC, it does not want to part it out.
So the only deal is the GM trade off with Cerberus for Chrysler, GM gets Chrysler and Cerberus get the majority of GMAC.
I would imagine Cerberus may keep a small stake in GM-Chrysler and GM keep a small stake in GMAC.
Another problem that needs to addressed is the German company Daimler owning 19.1% of Chrysler. Does GM pay them off? or are they figured into this massive deal?
However GM needs the cash from the Federal Government now to facilitate a deal and may get desperate in it's attempt to purchase Chrysler.
In the time it took me to update this blog, GM lost $440,000 Buckaroos!
GM is losing $1,000,000,000 a month, ruffly $32,000,000 a day!, $1,300,000 an hour, $22,000 a minute and $366.00 a second!
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Detroit News Reports:Chrysler-Nissan talks halt
Chrysler-Nissan talks halt
No more discussions scheduled after Cerberus acknowledges preference for GM deal, sources say.
Christine Tierney and David Shepardson / The Detroit News
Talks between the Renault-Nissan alliance and Cerberus Capital Management LP have stopped as both sides acknowledged Cerberus's preference to conclude a deal for Chrysler LLC with General Motors Corp., according to sources familiar with the situation.
No more talks between Cerberus and Renault-Nissan negotiators have been scheduled, the sources said Friday, although the parties have not ruled out discussions in the future.
Cerberus and Nissan declined to comment. But sources close to Cerberus have said the private-equity firm favors a GM-Chrysler deal, viewing it as financially more advantageous and also better for the U.S. auto industry.
GM wants to acquire Chrysler if the financing can be arranged, whereas Renault-Nissan had proposed to take a stake of around 20 percent. However, Cerberus and Renault-Nissan negotiators had not agreed on a valuation for Chrysler, which is losing money. Read More.....
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No more discussions scheduled after Cerberus acknowledges preference for GM deal, sources say.
Christine Tierney and David Shepardson / The Detroit News
Talks between the Renault-Nissan alliance and Cerberus Capital Management LP have stopped as both sides acknowledged Cerberus's preference to conclude a deal for Chrysler LLC with General Motors Corp., according to sources familiar with the situation.
No more talks between Cerberus and Renault-Nissan negotiators have been scheduled, the sources said Friday, although the parties have not ruled out discussions in the future.
Cerberus and Nissan declined to comment. But sources close to Cerberus have said the private-equity firm favors a GM-Chrysler deal, viewing it as financially more advantageous and also better for the U.S. auto industry.
GM wants to acquire Chrysler if the financing can be arranged, whereas Renault-Nissan had proposed to take a stake of around 20 percent. However, Cerberus and Renault-Nissan negotiators had not agreed on a valuation for Chrysler, which is losing money. Read More.....
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Detroit News Reports:Chrysler-Nissan talks halt
Chrysler-Nissan talks halt
No more discussions scheduled after Cerberus acknowledges preference for GM deal, sources say.
Christine Tierney and David Shepardson / The Detroit News
Talks between the Renault-Nissan alliance and Cerberus Capital Management LP have stopped as both sides acknowledged Cerberus's preference to conclude a deal for Chrysler LLC with General Motors Corp., according to sources familiar with the situation.
No more talks between Cerberus and Renault-Nissan negotiators have been scheduled, the sources said Friday, although the parties have not ruled out discussions in the future.
Cerberus and Nissan declined to comment. But sources close to Cerberus have said the private-equity firm favors a GM-Chrysler deal, viewing it as financially more advantageous and also better for the U.S. auto industry.
GM wants to acquire Chrysler if the financing can be arranged, whereas Renault-Nissan had proposed to take a stake of around 20 percent. However, Cerberus and Renault-Nissan negotiators had not agreed on a valuation for Chrysler, which is losing money. Read More.....
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No more discussions scheduled after Cerberus acknowledges preference for GM deal, sources say.
Christine Tierney and David Shepardson / The Detroit News
Talks between the Renault-Nissan alliance and Cerberus Capital Management LP have stopped as both sides acknowledged Cerberus's preference to conclude a deal for Chrysler LLC with General Motors Corp., according to sources familiar with the situation.
No more talks between Cerberus and Renault-Nissan negotiators have been scheduled, the sources said Friday, although the parties have not ruled out discussions in the future.
Cerberus and Nissan declined to comment. But sources close to Cerberus have said the private-equity firm favors a GM-Chrysler deal, viewing it as financially more advantageous and also better for the U.S. auto industry.
GM wants to acquire Chrysler if the financing can be arranged, whereas Renault-Nissan had proposed to take a stake of around 20 percent. However, Cerberus and Renault-Nissan negotiators had not agreed on a valuation for Chrysler, which is losing money. Read More.....
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Saturday, November 1, 2008
Lastest CNN Report:Treasury says no aid for GM, Chrysler
NEW YORK (CNNMoney.com) -- A merger between U.S. automakers General Motors Corp. and Chrysler is likely on hold until after next week's presidential election, as the U.S. Treasury Department said it will not provide the automakers with aid, the Detroit Free Press reported Friday.
GM had asked the Bush administration and Congress for a loan of about $10 billion to help keep the struggling company operational. It said that it could possibly use the aid to fund a merger between it and Chrysler, which is owned by Cerberus Capital Management.
Many experts have said both companies would need to merge to stop their recent bleeding. GM (GM, Fortune 500) has only about $21 billion in cash and Chrysler has $11 billion, although most of that was borrowed.
GM said Wednesday that overall sales were down 11.4% worldwide in the third quarter compared to the same period a year earlier. With auto sales plummeting globally, analysts say the merger would save the companies billions of dollars in redundant expenses.
But that would also mean tens of thousands of jobs lost. Analysts have estimated that the total job loss in a GM-Chrysler merger could be as high as 90,000.
Furthermore, the Treasury is currently strapped with nearly $3 trillion in Federal bailout and credit liquidity programs aimed at stemming the recent financial crisis gripping the U.S. economy.
After news broke that the government would not provide the companies with aid, the Michigan Economic Development Corp. canceled a meeting of local governments to discuss the possible merger, the Associated Press reported.
The Treasury, GM and Chrysler could not immediately be reached for comment.
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Lastest CNN Report:Treasury says no aid for GM, Chrysler
NEW YORK (CNNMoney.com) -- A merger between U.S. automakers General Motors Corp. and Chrysler is likely on hold until after next week's presidential election, as the U.S. Treasury Department said it will not provide the automakers with aid, the Detroit Free Press reported Friday.
GM had asked the Bush administration and Congress for a loan of about $10 billion to help keep the struggling company operational. It said that it could possibly use the aid to fund a merger between it and Chrysler, which is owned by Cerberus Capital Management.
Many experts have said both companies would need to merge to stop their recent bleeding. GM (GM, Fortune 500) has only about $21 billion in cash and Chrysler has $11 billion, although most of that was borrowed.
GM said Wednesday that overall sales were down 11.4% worldwide in the third quarter compared to the same period a year earlier. With auto sales plummeting globally, analysts say the merger would save the companies billions of dollars in redundant expenses.
But that would also mean tens of thousands of jobs lost. Analysts have estimated that the total job loss in a GM-Chrysler merger could be as high as 90,000.
Furthermore, the Treasury is currently strapped with nearly $3 trillion in Federal bailout and credit liquidity programs aimed at stemming the recent financial crisis gripping the U.S. economy.
After news broke that the government would not provide the companies with aid, the Michigan Economic Development Corp. canceled a meeting of local governments to discuss the possible merger, the Associated Press reported.
The Treasury, GM and Chrysler could not immediately be reached for comment.
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Friday, October 31, 2008
Obama: I'll meet with Detroit automakers immediately!
Gordon Trowbridge / Detroit News Washington Bureau
Democratic presidential nominee Barack Obama said Thursday he would immediately meet with the heads of Detroit's automakers and union once he takes office, telling NBC News, "We do need American cars."
Obama's comments came in an interview with anchor Brian Williams to air later Thursday on NBC's "Nightly News."
"My hope is if I'm elected, that I'm immediately meeting with heads of the Big Three automakers, as well with the United Auto Workers," Obama told Williams. "And to sit down and craft a strategy that puts us on a path for an auto industry that can compete with anybody in the world." ....More
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