GM wants $10 billion in aid from the Feds to buy Chrysler
In the latest development of The Incomprehensible Union, General Motors is reportedly asking the U.S. government for $10 billion -- on top of the $25 billion loan approved recently -- to help it merge with Chrysler. The supplemental infusion would give the government, i.e. you and me, a stake in the merged company in the form of preferred stock, would see the government taking over pension obligations and provide a credit line for operations.
The government is weighing the request since it's likely that no federal official wants to be on the watch that saw the instantaneous vaporizing of two American icons and hundreds of thousands of jobs. The government has asked that as many jobs as possible be spared, and GM said "Sure!" Yet for a merger where cost savings and redundancy elimination have been the headlines, we don't know why anyone believes GM-Chrysler wouldn't jettison a whole bunch of the 11 brands, 10,000 dealers, and 100,000 union jobs. And that's just for starters.
Which is one of the (many) reasons we still don't understand the GM-Chrysler union. The additional $10 billion we can swallow -- after all, the government spends much more than that on projects that could be considered far more dubious than trying to save an astronomical number of jobs and businesses. And we know what Cerberus gets from the deal. We'd like to find out what the GM guys see that makes this merger attractive... other than the fact that Chrysler has $11 billion in cash.
[Source: Reuters]
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Reader Comments (Page 1 of 4)
BOBBIE T 4:13PM (10/28/2008)
Seems like this may really happen. The landscape of the domestic cars brands will change for sure. If they are to survive, it may be the only thing to do.
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Tim 4:43PM (10/28/2008)
HotRodz that is his base salary. You are not counting "bonuses" and stock options. Total compensation is 14 million
TJ he makes statements about GM, Unions and CEO's none of those groups represent America as whole. They are institutions make the distinction
TJ 4:47PM (10/28/2008)
Tim, you replied to the wrong post... and entirely skipped my point about projection.
AZZO45b 5:24PM (10/28/2008)
GM: Give us the 25 BILLION for new product development & 10 BILLION to buy Chrysler...
...BUT good luck when the states come asking for BILLIONS for all the unemployment $$$ needed for Chrysler workers, + the massive foreclosures & bankruptcies caused when GM eliminates everything Chrysler. But as long GM gets their $$$ first.
Great plan (not)!
Tool 5:25PM (10/28/2008)
I'd be okay with loaning GM $10 Billion to acquire Chrysler, but there needs to be some significant dollars put towards outplacement/retraining/relocation of the tens of thousands of workers who will undoubtedly lose their job.
Let's be realistic: this will be the most significant realignment in the history of Detroit. We need to support this region even if many of us think both the Detroit 3 management and the UAW are completely brain dead.
Gabagool 4:13PM (10/28/2008)
NO WELFARE FOR GM.
NO WELFARE FOR UNIONS.
Wagoner makes 17 million dollars a year, if he wants as much as a penny of of taxpayers money he should give up his salary.
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why not the LS2LS7? 4:21PM (10/28/2008)
Yeah, this is ridiculous. What kind of stupid idea is it to bail out midwestern companies? We only bail out NYC fatcats in this country. Anything else is socialism.
TJ 4:22PM (10/28/2008)
Your posts in every thread are the epitome of anti-american hatred and disgusting projection.
HotRodzNKustoms 4:22PM (10/28/2008)
I just have to correct you on that salary thing Rick will make $2.2 million this year. Which is a far cry from $17 million and far underpaid compared to other companies of similar size regardless of posting red or black ink
Gabagool 4:26PM (10/28/2008)
http://www.thetruthaboutcars.com/gm-ceo-rick-wagoner-scores-144m-for-07/
Tim 4:31PM (10/28/2008)
TJ yeah don't like it call it Anti-American.
Hotrodz
Dick Wagoner made 14 million last year while gm lost 40 billion and it shares are at 80 year lows. Lord help you if you can't find anything wrong with that.
http://www.reuters.com/finance/stocks/officerProfile?symbol=GM.N&officerId=55982
HotRodzNKustoms 4:36PM (10/28/2008)
http://www.leftlanenews.com/gm-chief-rick-wagoner-back-to-full-salary.html
TJ 4:37PM (10/28/2008)
Tim, look at his other recent greatest hits:
"Does it get 2 MPGs like most other GM engines?"
Please, don't feed the troll.
Temple 4:39PM (10/28/2008)
I want GM to be saved, but NO TAXPAYER MONEY should be going to coshy deals for the UAW. They have contributed to this whole mess with their toxic labor contracts.
Helping the big3 on new technology is reasonable, so is granting them loans to get back on their feet, but we are not a socialist country, the US government shouldn't be owners in a car company- there shouldn't be a national car company.
Gabagool 4:41PM (10/28/2008)
TJ, hold on there a second sparky. You have been defending Wagoner in here..........................HELLO the company is about to go bankrupt and you defend a CEO who took it there.
Without governments help GM will never develop fuel efficient cars, that is why they got that 25Bil.
By the way TJ, if you have some time this weekend visit your local Honda dealer and see how REAL cars are made.
Big Rocket 5:01PM (10/28/2008)
@TJ: When you use sarcasm and others miss it, the others are at fault; but when others (such as Gabagool) use sarcasm and you miss it, the others are at fault again? In case you forgot what you wrote just 2 weeks ago:
TJ @ Oct 15th 2008 2:47PM wrote: "cars are getting too fast and too cheap. If this trend continues, many people will perish on our roadways until drivers ed training catch up to changes in automotive technology."
TJ @ Oct 15th 2008 3:34PM wrote: "I have a very hard time believing you couldn't find ANY trace of sarcasm in my post. do you really need '/sarc' in order to locate sarcasm?"
Link:
http://www.autoblog.com/2008/10/15/mitsubishi-evolution-x-fq400-gets-the-green-light/
Kodd 5:11PM (10/28/2008)
All this talk about how much he makes and how GM is about to go under is pure nonsense. Most of that number is going to come from stock purchase plans/RSUs/etc. So if the company's stock is low, then the amount of money he has is low. And just because GM's stock is low doesn't mean they are about to go bankrupt, you know why? Its called MARKET CAP. At the closing bell today GM was trading at $6.25, which is a low number, but its MARKET CAP is $3.54B. Yeah, that's BILLION!!!
The truth is, gov't intervention and assistance to the big 3 would really help prop up the economy. So many American jobs are provided by these three. And if American's would get it in their heads that just because they USED to be sub-par doesn't mean they STILL are. Go look at some GM cars, they have come a long long way. And if you are in the market, buying American will actually HELP YOU in terms of helping this economy turn around.
EVan 6:06PM (10/28/2008)
@TJ
Don't worry... I as well think Gabagool... or Mike or whatever his name is this week is a total idiot. I think most regular readers do as well.
This guy really doesn't like GM. We get it.
Big Rocket 6:07PM (10/28/2008)
@Kodd: It can be argued that the recent resurgence of desirable vehicles from GM (and the Big 3 in general) can be attributed to the reluctance of the American public to buy lackluster domestic vehicles in the past. In other words, GM was forced to come up with better cars to regain lost market share to ensure its own survival. If the federal government starts handing out billions of taxpayers' dollars to ensure GM's survival, what incentive remains for GM to continue making world-class vehicles?
Gabagool 7:11PM (10/28/2008)
@ Big Rocket, exactly, it's called competition. GM never made a good sedan, CamCord and other dominate the segment.
Losing Billions forced GM to come up with a good sedan, competition is the ONLY reason Malibu is here.