GM and Chrysler

The administration report has been released. Both GM and Chrysler are not viable, and their plans to viability are unrealistic.

GM does have a chance at viability given some drastic restructuring. To that end, Rick Wagoner has stepped down at the administration’s request and GM will get temporary funding for 60 days. It has to restructure drastically at that time or that’s it.

Chrysler has 30 days to seal the deal with Fiat, or it’s over. The report is rather scathing of Chrysler’s position, lineup, and quality of cars.

That’s a surprisingly good sign. Let’s hope that the unions don’t kill any real restructuring. I think a court will have to be involved, for that reason, but it’s a step in the right direction for sure.

Let’s hope management at GM and Chrysler don’t kill any real restructuring.

I wonder what package Wagoner walked away with?

Why on earth would Fiat want to form an “alliance” with Chrysler? That company is so worthless that no other carmaker wanted to take it off Daimler’s hands.

Hmm, maybe they just want the dealer network to sell their own cars…

I am guessing that Fiat wants to try to get into the American car market and like you mentioned they need a dealer network.

Dammit, I was just going to get one of the new Camaros!

I kind of wish they were treating the bailout banks in a similar way. I wonder if there are any ex-auto execs in the admin/treasury…

I read this as mixed news. I think it’s good that we’re finally taking a hard stance with both companies in order for them to get continued help. On the flip side, should one or both fail, this will wreck havoc with pricing and availability of steel that the company I work for uses in the midwestern states.

I’m guessing that Chrysler is done. Fiat has little incentive to cut a deal at this point, since it knows that it can just wait thirty days and then get whichever pieces of Chrysler it wants at the bankruptcy fire sale.

Woo hoo! Free cars!

Yeah. Funny, that the companies first felt the crunch are ones that produce structured matter. The completely abstract firms providing unkept promises are still left alive.

Has the White House asked executives of financial firms to step down? I don’t mind that the government is making specific demands, given the amount of public bailout money & loans. The initial reaction among my friends & family in Michigan, however, is that it’s a double standard. Demanding a return of AIG executive bonuses is symbolic, but has much less impact on future business operations than replacing the CEO of an automaker.

Maybe the Obama administration reasons that Americans can still buy cars from foreign companies if American automakers fail, but that American financial companies must continue, because they are crucial for the entire world’s economic health.

I’m still figuring out my opinion of the decision. My initial emotional response is the government should be asking bank executives to step down as well.

Things have already sucked in Detroit for quite a while now. I don’t want to imagine how much more they’ll suck if either of those companies really goes under.

It probably is for the best in terms of the big picture - they really weren’t sustainable businesses - but I feel for the people who will be affected. I grew up in Detroit and a lot of people I know will be hurting if the worst happens.

Those look pretty good, I must admit–300 ponies from the V6, and killed styling. My guess is that even if GM goes belly up, technically, there will still be GM cars being made for the foreseeable future. Whether people will buy from a bankrupt company or not, that’s another thing. But really, if the cars are as good as they’ve been–and many of GMs vehicles have received good reviews and generally seem solid–and the price is right, I think people will buy.

After all, I owned a seventies-era Dodge, and a made-in-the-USA Rabbit, and as far as service and support goes, that was like owning a car from a non-existent company in both cases!

Yeah, it seems pretty odd at best that the head of GM is asked to step down as part of the funding agreement, but the heads of the financial institutions that actually created this crisis are not.

One guy losing his job at any layer is irrelevant. Pick a plan, fire people that aren’t willing/able to deliver on that plan and hope for the best. Symbolically firing someone and causing more chaos, or leaving someone in control when they aren’t committed to the plan are both mistakes.

In other words, I leave it to the people whose job it is figure out the best path for the companies to decide if firing executive is a part of that plan. They are in control of billions of taxpayer assets, who they decide to use as CEO in minor in comparison. I dont want the government delivering a blanket CEO fire oder just because it makes us feel like justice has been delivered.

I know that the gut reaction is to think that the CEO’s must be incompetent or we wouldnt be in the mess that we are. I think thats a very narrow view of the situation (most are victims much as we are) and I leave it to people who are handling the details to make the right call.

Didn’t we replace the CEO of AIG?

Isn’t Chrysler owned by Cerberus a private equity company? Why’d we bail out a privately held company?

The ownership is irrelevant, and bailouts usually largely or even fully wipe out the ownership stake anyway. The reason for bailouts is to keep the business itself running.