This actually might make sense ...

No, it wouldn't. GM already has too many brands and Chrysler overlaps almost completely (except the minivan franchise). Auto sales will probably be 10-11M units next year. GM would end up shutting down half the plants they buy in 3 years.

It's pure insanity unless its a negotiating tactic with Ghosn at Nissan-Renault by Cerberus.

One of these will fail and if GM and Chrysler merge, then it'll be Ford. In the end, i believe they should all merge get rid of or sell certain useless brands.

Any estimates on how jobs would be cut? Can't read the entire article; too poor for wsj.com.

GM might be buying Chrysler to close brands and reduce competitors in a declining market.

OT - but Lehman/Barclays related:

The Case For Sleep: What Happens In Excel After Dark

The Case For Sleep: What Happens In Excel After Dark - Above the Law - A Legal Tabloid - News, Gossip, and Colorful
Commentary on Law Firms and the Legal Profession

I had to laugh

VW's mini van looks like a winner too: VW Routan - Volkswagen Routan Minivan - VW.com .

Of corse, they'll find a way to keep from being relevent.

[i]not a banker writes:
Not One Cent writes:
GM might be buying Chrysler to close brands and reduce competitors in a declining market.
Not One Cent | Homepage | 10.10.08 - 11:17 pm | #

And to shed it's boat anchor finance arm.
not a banker[/i]

Yes.

Berlusconi Says Leaders May Close World's Markets (Update1)

By Steve Scherer

Oct. 10 (Bloomberg) -- Italian Prime Minister Silvio Berlusconi said political leaders are discussing the idea of closing the world's financial markets while they ``rewrite the rules of international finance.''

The idea of suspending the markets for the time it takes to rewrite the rules is being discussed,'' Berlusconi said today after a Cabinet meeting in Naples, Italy. A solution to the financial crisiscan't just be for one country, or even just for Europe, but global.''

Oooh, oooh.

Here's the part where we fight Godzilla with the powerful atomic battle saucer that's the peak of human ingenuity, and he smashes it in like 5 seconds after tremendous build.

I would rant more, but the domestic auto industry depresses me almost as much as the Bush administration. It's Friday and I don't want that kind of vibe.

VW's mini van looks like a winner too: VW Routan - Volkswagen Routan Minivan - VW.com.

Of corse, they'll find a way to keep from being relevent.

The Routan is just a Chrysler in VW drag.

-Jaso

The Routan is just a Chrysler in VW drag.

...And Chrysler wouldn't let them have the stow-and-go seats...

topper writes:
so now that oil is so cheap can we expect to see green cars go the way of the dinosaur?

Oil will only stay cheap as long as nobody can afford it.

At least GM is still being reasonable, and paying their bills more or less on time.

That sounds like something we want companies to keep on doing.

We could use fewer car companies. I say go ahead and merge or die. Whatever it takes.

Chrysler is useless, I have no idea why anyone buys their products. And no idea why Cerberus bought them. They should have gone away 20 years ago.

BTW, McPain was certainly right about one thing: I would like to see Chris Cox's head on a pike right about now. What a useless stooge.

Back in the day I used to drive a truck that was fun stop light to stop light.

Early 50's tow truck with old styler tires, duals in back.

Looked very slow until the secondaries on the Edelbrock 650 opened up still in first gear. Had a custom rebuilt 350 from a 79 trans am shoved in under the hood backed by a chevy 4sp with 12 inch clutch with hurst shifter and 4.11 rear end. 0-60 with one gear shift! Fairly heavy truck, but very fast in a straight line.

Too much time with law enforcement following me, and adulthood has led to the current semiretired status.

Still have it, but need to do some maintenance and get around to installing seatbelts. Don't want to sell it, as it is a total widowmaker if you don't know how to drive it.

Someday this war's gonna end...

I used to read here much more before the hordes came along..

Many of the responses show how ignorant everyone is of the situation..

GMAC is the humongous financing arm of GM. IF GM cannot get rid of GMAC, GM is much less likely to survive.

So.. yes, it does make perfect sense. Looks like Cerberus is willing to roll the dice on getting all that bailout cash shot up their wazoos while GM just wants to wash its hands and stick to cars.

It's unbelievable how "readers" of this blog can be unaware of what GMAC is and what it would mean for GM to cut it loose..

..but maybe that's just the wine talking..

But the marriage of G.M. and Chrysler has far more potential than hitching Chrysler to a foreign automaker. While G.M. and Chrysler may be hamstrung by labor contracts from cutting jobs, the two companies could combine dealers, product lines and advanced vehicle technology.

So, so much wrong here...

Meanwhile, Ford wants to sell most of its Mazda:

Ford plans to sell most of stake in Mazda-NHK
| Reuters

FFDIC | 10.11.08 - 12:22 am | #

Posted that upthread.

"Let's shut down global markets and then have an argument about the successor regime, which will be entirely illegitimate, and do nothing to address the bubble."

Maybe CSC is right. It will look like the Road Warrior by Oct 31 with these geniuses in charge.

Here is the Google News link if you wish to read the entire WSJ story.

RE, I believe that to some extent, Simmons is most likely correct about the state of production for the next few years from KSA- but then they will put a lot of reserves into production. That drop in output will now be quite useful in propping up prices, no?

Someday this war's gonna end...

Here we get further into the spiral of the real economy.

Yahoo! 404 - Page Not Found

Investors worry that Argentina, one of the world's top grain exporters, may not be able to maintain a budget surplus and keep servicing its debt now that soy and wheat prices have sunk more than 40 percent from this year's record peak. Chile, the world's top copper producer, had its first trade deficit in eight years last month, after copper prices slid 45 percent since May.

The hardest-hit countries are likely to be oil-reliant Venezuela and Mexico, analysts say. Both draw more than 40 percent of their federal budgets from oil, which has dropped more than 45 percent to hover around $80 a barrel since hitting a record high of $147.27 on July 11.

Dylan Ratigan for president, nailed it? Not quite... This is from just 11 months ago.

YouTube - Patrick Byrne "We are living in a house of cards"

Golden Gate Bridge to get net to catch suicides
| Reuters

Just in time... .. .
Golden Gate Bridge to get net to catch suicides

I've considered this action in the past. My take then as it is now, would be this 'merger' only goes through if it is to allow closure of half the plants, dealerships, everything but use the merger as political cover to allow the government to give the new company ~40bn in no-interest loans, and then raise another $10bn of capital

I don't see it happening, because if GM took the downturn seriously enough they would have consolidated their brands, and closed their oldest factories already. For the past year GM's leadership has reminded me of Dick Fuld in the sense that they cannot imagine being allowed to fail.

Cerberus had no idea what they were walking into when they bought Chrysler. Their 2 chances of survival are government money, or a merger of nissan-chrysler-renault (not just cross-shareholding). They need to gain size before their loans roll over, otherwise a poorly run company will still be burning cash no matter what costs they cut.

Ford I think will be auctioned for its truck division in America, and sedans in Europe. They are the worst operators of the major car companies so divesting their luxury brands really doesn't help with their real problem. Mullally was an overhyped CEO at best, as can clearly be seen with the trouble Boeing has been in (787 delays, fumbled tanker contract, ...)

Toyota will make it through, but are they ever going to blindside investors with unforeseen losses. Their strategy has been to beat GM at its own game of being #1 in size. The evolution of their trucks summarizes the failures they have positioned themselves for and it takes at least 2 years to course correct vehicle production due to the engineering and factory work. They only have the Prius because they didn't have the confidence to call California's bluff before.

In America alone, there will be 10mn fewer vehicles sold over the next 2 years. Inventory that large is not an option, so whomever can best scale down their operating costs for a 12mn annual new sales in America market will do the best. My bet there is Honda.

During Frantic Trading, Rick Santelli Finds Toupee On Trading Floor (VIDEO)
During Frantic Trading, Rick Santelli Finds Toupee On Trading Floor (Video)

CSC - Too short to be Erin's or Maria's... just sayi

RE, I believe that to some extent, Simmons is most likely correct about the state of production for the next few years from KSA- but then they will put a lot of reserves into production. That drop in output will now be quite useful in propping up prices, no?

I agree that Simmons is on the mark. As Ghawar goes so goes the oil market. It just has to hit public consciousness in the West (not just the Oildrum) and with a 2x4 people like Fadel Gheit. Clearly SA (Aramco) will be the LAST to admit that it occurs. We will only hear it through the grapevine and outside analysis.

The problem for SA is that it cannot easily absorb either high inflation such as it is currently experiencing nor can it absorb easily such huge drops in price as we currently see. Its economy and domestic stability is quite volatile and severe economic disruptions can easily topple the regime.

Note that most think that current inflation statistics in SA are severely understated. If we get a significant bout of inflation because of this worldwide coordinated action (printing), potentially even combined with lower relative oil prices for a certain period then this could deteriorate quickly.

hehe, well I never had much to offer other than "teh swapz will swamp us all!!!" or "please voice outrage in form of a haiku"... but still.. it was fun.

Well, it was a valuable call and right on the mark. Glad to have you back!

How much will this cost us?

How about one or more of them just folds up the tent.

The industry problem is too much capacity. It's simple.

404 Error, No such article | Chron.com - Houston Chronicle
Want a free house? Just haul it away
"KAYSVILLE, Utah — Is the credit crunch keeping you from getting a home loan? Well, here's a little beauty you can have for free. You just have to pay to haul it away. Jacquie Jones of Kaysville, Utah, is offering a three-bedroom brick bungalow built in 1910. She says the home has to make way for new houses she's building on the lot. She says the home was featured in one of the "Benji" movies and an episode of "Touched By An Angel."
"She would rather give it away than see it bulldozed. She says it would cost at least $18,000 to lift the house and take the garage, more depending on the distance of the move."

Obama's universal health plan is not a mandate, nor is it single payer. No way any worker moves from GM's no cost coverage to a government premium and co-pay system.

Apparently you're not familiar with Bartiromo's merkin. That wasn't a part line.
Currently Smoking Cannabis | Homepage | 10.11.08 - 12:52 am | #

Doubtful. LOL. Santelli would have had it in his big mouth not his little sweaty hands.

Obama brings universal healthcare- allowing the legacy healthcare to be put off to the government.

I hope so, but it won't happen right away, even if the Dems get to a Lieberman-free 60. Can GM/F/C last that long?

My old buddy from the northern forests visited last winter. Now where did I put that???

fingernail sized piece of lettuce will do as well if you don't have an orange.

cricket, cricket, cricket.......

haven't seen it this quiet in here for a while.

Anyone still buying minivans is getting an Odyssey or Sienna.

-Jason

Copy that. The Odyssey is well worth it.

FFDIC, I'm with smoking. If they put a net under the GGB, its going to put the roller coaster parks out of business...

GM should go forward... to 'give' away GMAC. Ghad... it is a boat anchor.

Got Popcorn?
Neil

"Sunday eve, if I remember correctly."

You remember correctly. I'll be passing along excerpts of Conjure's report.

If we are to believe Citizen AllenM, some late breaking news Sunday evening might change the contents of Conjures report.

Or I suppose Allen M is channeling our Anonymouse Persecuted Comrade.

So... do we have four watertight compartments filled with water, or five? Are we feeling lucky, punks?

I'll be passing along excerpts of Conjure's report.

I've already picked out a spot on the floor to curl up in, sucking my thumb and crying mommy. Now it looks like I'll be seeing Titanic reruns on the inside of my eyelids while I do it.

By the way, kudos to everybody who knows what a merkin is. If only the 'merkin people had understood the joke GWB was making at their expense for all these years....

Chrysler - the camel's nose. Good thing the taxpayers bailed them out last time. How many times have you heard that as the justification for whatever bailout scheme govt. desired next?

Sorry Ben...

Of course health care costs will rise and quality will plummet if government even touches health care.

kidbuck | 10.11.08 - 5:25 am

BWAHAHAHAHAHA!!! Have you ever checked statistics about cost-efficiency and healthcare outcomes in different countries. Several countries with socialised healthcare, e.g. France, do much better than the USA.

Get real! get a clue! Sop spouting ideological nonsense that just doesn'ty stand up against even the most cursory factual enquiry.

Merging one losing company with another losing company just makes a bigger losing company. Until the pension situation is dumped on the tax payers both are going to struggle. I believe GM has close to 1 M retirees on a pension now, they just spent $30 Billion to off-load their health care obligations to the UAW. The domestic auto industry's problems were sowed decades ago and has affected innovation, quality etc. I believe greater than 90% of all GM profits (when it was profitable) went to retirees with the other 10% split between the management and shareholders.

CR is probably right -- the GM-Chrysler merger could make a lot of sense in desperate times. Let's see the details of what Cerberus would pay and what GM would get.

GM and Ford are the only companies in the world willing to take on Chrysler's UAW obligations, since they're already stuck. Eliminating Chrysler would make it harder for UAW to bargain against GM.

Presumably GM would get Chrysler's share of the $25 billion in US loans for energy efficiency. GM might also be able to get the Obama administration to help with its pension and health care legacy burdens.

Chrysler minivan and Jeep are strong brands. I own Chrysler minivans and I'm surprised at negative comments. Their minivans are simple and cheap, which is the most that hardpressed young families will be able to afford in the future.

What no one mentioned was the fact that GMAC is the financing arm for GM. They do 70%+ of GM's dealer financing. Take that away and sell off the paper at a profit -- hypothetically -- to the US gov. and how does GM sell cars?

GM and Chrysler are just combining so that they are sure to be bailed out when bankruptcy is threatened. This is what this is all about, nothing more.

definitely too big to fail now.

Or too failed to be big.

GM and Ford are the only companies in the world willing to take on Chrysler's UAW obligations, since they're already stuck. Eliminating Chrysler would make it harder for UAW to bargain against GM.

The smart move would be for a merged GM - Chrysler to include the UAW in a modified 'ESOP' structure where they trade off quite a lot of equity position fro serious labor give backs... roll all future pension/health care liabilities into the deal and if the company thrives - the UAW comes out a lot closer to whole... if the company dies the whole thing goes down the tube - UAW, equity & bond holders.

This would require a lot more dilution on the part of current equity but result in a competitive industry (assuming they do it right).

Its the one way you could possibly alighn all the interests.

Realize mgmt at the big three have been very confrontational w/ the UAW going back many decades & UAW has responded in kind - there is precedent & history there going back generations.

I once had a mfg prof who would say over and over: management gets the union they deserve, the union they create themselves. The UAW was a Big Three creation - a monster - it just didn't happen.

The only possibility they all have to work something out that benefits them self will have to benefit all the other parties too. Until they ALL realize that and buy in - its goin' nowhere.