Merger, Who Is It Good For? A Big Al Rant

[Buick61]

Originally Posted by BigAls87Z28

LX and LY are substandard compared to Zeta. Zeta is ready for mass production in the revised Oshawa plant. If we are going to say that the better platform is the one for mass production, then FWD is the way to go as its easier to package, and neither Zeta, LX/Y or Sigma would be a good choice to replace a high volume line.
BUT, GM has a massive plant in Oshawa designed to build 500k units, and all it has right now is 100k of Camaro and whats left of Impala.
Zeta has been shown to outperform the LX cars time after time, and the new Camaro will seal the deal that Zeta can provide a better more flexible platform capable of several wheel base lengths and dimensions over the one size fits all LX cars.

1. There are two different size wheelbases for the LX/LC cars, and three different body lengths...

2. Zeta is NOT ready for mass production. All they have signed up in Oshawa is the Camaro, and that's going to be about 50,000 units in 2009? And it's not even in production yet.

3. How do you know LY is substandard to zeta if it isn't even out yet?

4. We have zeta on one car right now--that's built all the way around the world, and you're acting like GM can flip a switch in the Oshawa plant and produce the 200,000 LX/LC cars that are currently being made in Brampton PLUS the 60,000 Camaros.

GM needs cash now. It can't afford to wait for the next product cycles. GM needs a high volume, high profit vehicle line. Zeta isn't there yet, and LX/LC is. Simple as that.

[jamiepeterson2]

What you are seeing unfolding before your eyes in print isn't really what is happening. There is a lot more behind the Cerberus/Chrysler-GM deal than you might be aware of.

GM, Ford and DaimlerChrysler have gotten themselves caught up in the current economic troubles that are now plaguing Wall Street. Not many people are aware that the Big 3 were the biggest players in the collateralized debt option (CDO) market.

Well, now those chickens are coming home to roost, and their ain't enough cash in the world to cover all those debts estimated to be around $596 trillion. GM's portion was about one trillion dollars in 2005. GM may have covered their butts somewhat with their partial sale of GMAC to Cerberus. But Ford was the number one player, and I don't have their figures yet.

This is serious business news that only a few insiders are knowledgeable about. We're talking about the direct loss of about one million jobs in the auto industry! Another 7 million or so secondary employees would be directly adversely affected. Plus about 30 million more people would suffer a sharp downward turn in their financial status. All this just in the Rust Belt!

This story is not about GM buying Chrysler, or Cerberus wanting to buy GMAC at all. JP Morgan Chase (the world's biggest predator banker) and Goldman Sachs (the two biggest players remaining in the financial market) hold the debt for Chrysler and they have told Cerberus to get a divorce. So they have arranged a shotgun marriage to take place with Chrysler and GM,. GMAC is the dowry. JP Morgan controls 85% of the collateralized debt obligations through their subsidiaries. That is the smoking gun that is being held against Rick Wagoner and the GM board. Secondarily they have orchestrated a substantial decline in stock value from a high of $43.20 earlier this year to about $6.60 today. Furthermore they have ordered GMAC to accept only credit worthy customers with a score of 700. Most Chevy owners score in the 600s. As a result GMAC financing contracts have dipped from 43% in September to only 20% in October. GM countered by offering their dealers a premium if they finance elsewhere. They are fighting a losing battle. If GM wants credit, it will have to cave into the JP Morgan cartel.

But all is not lost. Cerberus gets what it wants, the rest of GMAC which it can then merge with Chrysler Financial (something GM wouldn't let them do).
GM gets Chrysler which can actually be a good thing as Al points out. No doubt, GM's stock will recover as soon as the deal is set in stone. JP Morgan will ensure this will happen. Hopefully, GM can squeeze the $11 billion cash hoard from Chrysler coffers, plus another $3 billion to sweeten the deal.
The big winners, however, will be JP Morgan Chase and Goldman Sachs. If this deal doesn't fly, then watch both Cerberus and GM file for bankruptcy as they will be unable to obtain any substantial financing from anyone.

Better brand management is the key to the successful integration of Chrysler into the GM corporate structure. There is absolutely no way GM will be able to do what Chrysler did when they bought out AMC. The costs would be prohibitive as would closing dealerships or cutting out brands. It just wouldn't work.

So what might GM-Chrysler look like? The most economical and progressive plan would be:
GM would operate 10 auto assembly plants producing 3.6 million vehicles annually with about 3600 full line Cadillac/Buick/Pontiac/Chevrolet/Saturn/GMC dealers.
CHRYSLER would operate separately but concurrently with 5 dedicated auto assembly plants producing 1.8 million vehicles annually with about 1800 Chrysler/Jeep/Dodge dealers.
Together GM-Chrysler would then sell 5.4 million vehicles annually in America for about 33% market share.

CADILLAC would offer uncompromising RWD luxury vehicles.
CHEVROLET would offer main stream FWD cars and RWD trucks (plus Camaro, Corvette).
- PONTIAC would offer sporty turbocharged FWD Chevrolet rebadges.
- BUICK would offer upscale supercharged AWD Chevrolet rebadges.
- SATURN would offer renamed Chevy Volt and Chrysler Evs.
- GMC would only offer MD and HD trucks.
* SAAB could still be imported and sold through this channel.
* HUMMER, if it is still around, could still be sold through this channel.

CHRYSLER/JEEP/DODGE should be reinvented slightly to fit in the GM group and make it more viable. Ergo, the focus should be on young buyers; those who would not otherwise think of buying their father's Oldsmobile. OPEL already has the cars this demographic would be interested in. Therefore sell OPELS at these locations as Dodges.
CHRYSLER should keep just the 300M
JEEP should keep the Wrangler, Liberty and Grand Cherokee
DODGE in addition to OPEL products should keep the Caliber, Charger, Dakota (especially with the V8 option), Ram, and the Caravan (for now anyway). Challenger and Viper would be nice also, but they may not be able to survive against the Camaro and Corvette.

I think just about everybody wins in this scenario...even the customer!

[redvett01]

The biggest gain would be GM would retain the claim "Worlds largest MFR" beating Toyota