Paul Selby Posted October 21, 2008 Share Posted October 21, 2008 I found this Mopar fans point of view on the GM/Chrysler thing.....um..... interesting. So don’t assume GM will swallow Chrysler, dump Dodge, and then disappear itself. Even if it’s pitched as GM taking over Chrysler (so they can keep some executives as figureheads, or so they can more easily shut down Chrysler factories and vehicles and the Chrysler brand itself — which might be the least valuable brand in the entire GM and Chrysler franchise, given how much it has been associated with bailouts, Daimler, and takeovers), it might not be that way. Cerberus owns Chrysler and it may soon control a large enough chunk of GM to call the shots, even as its spokesmen profess helplessness - or, as they prefer to do, remain silent, and allow pundits to cover the wrong game. Thus it was recently suggested to me that, while the public story will remain that General Motors is buying Chrysler, the reality may well be that Cerberus is taking control of GM. http://www.allpar.com/weblogs/ Quote Link to comment Share on other sites More sharing options...
hoss96racing Posted October 21, 2008 Share Posted October 21, 2008 wow.... that would trully have to be a david and goliath point of view.... but this guy probably still thinks that the daimler takeover was a merger and that chrysler gladdly handed over all of their cash to help out their new partner.... some people over there have had a little to much kool-aid... Quote Link to comment Share on other sites More sharing options...
J-150 Posted October 21, 2008 Share Posted October 21, 2008 they make the HUGE assumption that this is a cash deal. Maybe they didn't notice, but GM has no cash on hand. This would be a stock swap. And after being burned on Chrysler, controlling GM is the last thing Cerberus wants to do. Quote Link to comment Share on other sites More sharing options...
old_fairmont_wagon Posted October 21, 2008 Share Posted October 21, 2008 Maybe cerberus wants control of the entire auto industry in the US. Look at it this way, if they can get a big, controling stake in GM (already own 51% of GAMC) from this deal, they can then proceed to use their volume position to drive Ford into the ground by selling everything at fire sale prices. Once Ford is on the ropes and the Ford family is desperate to unload the operations for whatever they can, they can get Ford's facilities as well, then, contact all their over seas friends and part out the best of what each has to offer to the highest bidder among the rich, foreign makes. They will recover their investment money, spin off or shutter the rest, and walk away all the richer while having single handedly demolished what was left of the US economy in the process. Or, GM will gain access to another captive credit agency through chrysler financial and begin to loan money for their own car sales again. One of the two seems likely. Quote Link to comment Share on other sites More sharing options...
TomServo92 Posted October 21, 2008 Share Posted October 21, 2008 Maybe cerberus wants control of the entire auto industry in the US. Look at it this way, if they can get a big, controling stake in GM (already own 51% of GAMC) from this deal, they can then proceed to use their volume position to drive Ford into the ground by selling everything at fire sale prices. Once Ford is on the ropes and the Ford family is desperate to unload the operations for whatever they can, they can get Ford's facilities as well, then, contact all their over seas friends and part out the best of what each has to offer to the highest bidder among the rich, foreign makes. They will recover their investment money, spin off or shutter the rest, and walk away all the richer while having single handedly demolished what was left of the US economy in the process. Or, GM will gain access to another captive credit agency through chrysler financial and begin to loan money for their own car sales again. One of the two seems likely. Having one company control the entire domestic auto industry might not pass FTC scrutiny, especially if it's the result of predatory pricing. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted October 21, 2008 Share Posted October 21, 2008 (edited) Having one company control the entire domestic auto industry might not pass FTC scrutiny, especially if it's the result of predatory pricing. How would it be one company controlling the domestic auto industry? The FTC won't make a distinction between Toyota or GM when it comes to determining monolopy status. A competitor is a competitor. It doesn't matter where they are from. The thing the FTC might raise an issue with though is a firesale in order to stifle competition. Not necessarily competition from Ford, but from anybody who sells cars in the US. Edited October 21, 2008 by NickF1011 Quote Link to comment Share on other sites More sharing options...
TomServo92 Posted October 21, 2008 Share Posted October 21, 2008 How would it be one company controlling the domestic auto industry? The FTC won't make a distinction between Toyota or GM when it comes to determining monolopy status. A competitor is a competitor. It doesn't matter where they are from. A merged GM/Chrysler dumping vehicles on the market in order to drive Ford out of the market is predatory pricing and is classic anti-competitive behaviour. That is exactly what was described in the post to which I responded. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted October 21, 2008 Share Posted October 21, 2008 A merged GM/Chrysler dumping vehicles on the market in order to drive Ford out of the market is predatory pricing and is classic anti-competitive behaviour. That is exactly what was described in the post to which I responded. Yes, that would be illegal. But there would be nothing wrong with a sole GM/Chrysler American automaker from a legal point of view if Ford happened to collapse under its own weight. Quote Link to comment Share on other sites More sharing options...
TomServo92 Posted October 21, 2008 Share Posted October 21, 2008 Yes, that would be illegal. But there would be nothing wrong with a sole GM/Chrysler American automaker from a legal point of view if Ford happened to collapse under its own weight. I agree in that scenario. Quote Link to comment Share on other sites More sharing options...
156n3rd Posted October 21, 2008 Share Posted October 21, 2008 Yes, ALLPAR is wearing rose colored glasses. They rarely accept any negativity. I questioned someone on a story done about the turbine cars and was almost thrown out. It is someone's private domain. I do not want to see any U.S. company get closed down. All this is happening right before the biggest holidays of the year. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 22, 2008 Share Posted October 22, 2008 Cerebus wants to cut and run, they don't like the car industry any more...... Quote Link to comment Share on other sites More sharing options...
lfeg Posted October 22, 2008 Share Posted October 22, 2008 Yep, they just want all of GMAC. They are finance guys, not manufacturing guys. Also, all this takeover, buyout, and selloff talk will just kill sales of Chrysler vehicles. Who would want to buy a car sold by a company that may not be here a year from now? Just what the dealers need. Reminds me of what happened to the Daewoo dealers when Daewoo was sold off, leaving them with nothing. Nobody would even give a sideways glance at the local Daewoo dealer. They could not give the cars they had left away. If the talk and speculation continues the same will happen to the Chrysler dealers. Quote Link to comment Share on other sites More sharing options...
old_fairmont_wagon Posted October 22, 2008 Share Posted October 22, 2008 The FTC has proven in the past that it has no problem with auto makers selling cars at what are effectively below cost prices. There have been several instances that auto makers have had to make "inventory corrections" (chrysler in particular) by offering "employee pricing" plus rebates on top of them. We all realize that there's no way to make money with that setup, but the FTC didn't give it a second look. A merged Chrysler/GM would have to make a substantial inventory correction of models that will be no longer produced and not even think twice about the write off. That act of dumping could completely destroy Ford as a side effect and still have never been actively predatory. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted October 22, 2008 Share Posted October 22, 2008 The FTC has proven in the past that it has no problem with auto makers selling cars at what are effectively below cost prices. There have been several instances that auto makers have had to make "inventory corrections" (chrysler in particular) by offering "employee pricing" plus rebates on top of them. We all realize that there's no way to make money with that setup, but the FTC didn't give it a second look. A merged Chrysler/GM would have to make a substantial inventory correction of models that will be no longer produced and not even think twice about the write off. That act of dumping could completely destroy Ford as a side effect and still have never been actively predatory. They would have a lot of inventory to dump, but not that much inventory. It's not like they would axe a brand and say "okay, we need all these cars gone next month". It would have to be a gradual process or they would sink themselves in red ink too. Quote Link to comment Share on other sites More sharing options...
TomServo92 Posted October 22, 2008 Share Posted October 22, 2008 The FTC has proven in the past that it has no problem with auto makers selling cars at what are effectively below cost prices. There have been several instances that auto makers have had to make "inventory corrections" (chrysler in particular) by offering "employee pricing" plus rebates on top of them. We all realize that there's no way to make money with that setup, but the FTC didn't give it a second look. A merged Chrysler/GM would have to make a substantial inventory correction of models that will be no longer produced and not even think twice about the write off. That act of dumping could completely destroy Ford as a side effect and still have never been actively predatory. Inventory corrections are fine. However, your original post indicated "intent" by GM/Chrysler to drive Ford out of the market. That is not acceptable by FTC. Most cases of this type are prosecuted almost entirely on circumstantial evidence. If the FTC even gets a whiff of predatory pricing, they'll drop the hammer. My employer requires us to go through yearly business practices training and most of it deals with how to avoid even the slightest hint of anti-competitive behaviour. This stuff is almost second nature to me now. Quote Link to comment Share on other sites More sharing options...
630land Posted October 29, 2008 Share Posted October 29, 2008 (edited) Allpar thinks someone will come in and save Mopar and bring back a full line Plymouth that can be #3 brand overnight. Also, they will cancel anyone [me] who says "Plymouth should stay buried". Edited October 29, 2008 by 630land Quote Link to comment Share on other sites More sharing options...
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