General Motors / Ford / Chrysler

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SouthAmerica

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October 29, 2008

SouthAmerica: I wonder why the US government is giving $ 25 bailout money to GM, Ford, and Chrysler, and now these 3 automakers want even more money.

The market cap of GM is around $3.5 billion dollars, Ford is around $ 4 billion dollars, and Chrysler should be around $ 1.5 billion dollars – then why the US government don’t nationalize these 3 companies and merge them into one for about a total price tag of around $ 10 billion dollars?

Why the US government is going to continue to throw taxpayer money on a money pit?

Maybe after these 3 companies are consolidated into one company under the US government ownership then they might be able to reborn as just one healthy American automaker.

Why the US government is going to continue supporting 3 dinosaurs?

Besides when the US government does the restructuring the Us government can transfer the Pension system of these 3 companies to the US pension guarantee.

Better yet - buy only GM and Ford and let Chrysler die a quick death.

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GM is a $100 billion dollar company. The fact that you think market cap is an indication of a company's real value shows your level of experience in financial markets. You probably think google is a $150 billion dollar company too.


Regards,
 
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October 29, 2008

SouthAmerica: Reply to krazykarl

Probably on your world AIG is also worth $ 100 billion dollars.

If GM was worth $ 100 billion dollars as you said then their stock would be selling for around $ 200 dollars per share.

Your calculation of GM stock worth $ 100 billion dollars include the social costs for Pension and healthcare?

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Quote from southamerica:

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October 29, 2008

SouthAmerica: Reply to krazykarl

Probably on your world AIG is also worth $ 100 billion dollars.

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Nope. I don't consider insurance policies assets.

GM has $40 billion in cash right now, before any loans, not counting any real estate, patents/IP, etc. You really need to educate yourself before you post useless/inconsequential ideas or hypotheses.
 
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SouthAmerica: Then let GM have a fire sale to see how much they can get for their assets minus outstanding liabilities.

Many years ago I bought few shares of White Motors because they had a very high book value compared with the stock price, but after that company filled for bankruptcy I found out that there was no demand for old and obsolete factories.

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Another waste of the Goverment bailout....
GM want $10B loan to keep it afloat, then want to use it to BUY Chrysler. (did I hear bonuses somewhere?)
Saint Louis, MO. Chrysler plant just rolled the last minivan off it's assembely line this week, and now the workers are dis-assembleing parts of the production line to ship it to the Canada Plant.
Well I am not going to cry for those UAW members.
 
Quote from options4me:

Another waste of the Goverment bailout....
GM want $10B loan to keep it afloat, then want to use it to BUY Chrysler. (did I hear bonuses somewhere?)
Saint Louis, MO. Chrysler plant just rolled the last minivan off it's assembely line this week, and now the workers are dis-assembleing parts of the production line to ship it to the Canada Plant.
Well I am not going to cry for those UAW members.
More...

Maybe Paulson has the balls to do the right thing for once....

Paulson to GM-Chrysler: No Bailout for You!
Posted Oct 31, 2008 01:56pm EDT by Aaron Task
Related: GM, F, NSANY, TM
Apparently there are limits to the government's bailout bonanza after all.

After funding bailouts and backstopping deals for a number of banks, brokers, GSEs and insurance companies, the Bush administration will not provide funding for a GM-Chrysler merger, Reuters reported early Friday morning.

As with all things related to the autos, this is a highly polarizing issue.

On the one hand, a lot of jobs are potentially at stake here. Earlier this week, six governors sent a letter to Secretary Paulson and Fed Chairman Bernanke encouraging government funding for the deal, citing the following:

355,000 Americans are directly employed by GM, Chrysler, and Ford.
4.5 million Americans work in sectors supported by the auto industry.
Over 2 million Americans received healthcare benefits from the "Big 3."
775,000 retirees and their survivors receive pension payments from the industry.
On the other hand, government support for a GM-Chrysler merger can't guarantee the jobs of current employees or the benefits of retirees. Even if you could set aside complicating issues like union contracts and the quality of the cars being made in America, automakers around the world are struggling right now with a slowing global economy, including industry leader Toyota and Nissan, another potential partner for Chrysler.

In addition, a government-sponsored deal will help private equity firm Cerberus Capital, which bought a majority stake in Chrysler at arguably the worst possible time.

At this point a GM-Chrysler deal appears to be on hold, at least until after the election. But this political and economic football can only be kicked down the field so far, and for so long.
 
you know what they should do:


get rid of all the corporate management (after all it is them that screwed themselves)

if the people's taxpayers are going to bail them out, why not just buy them out outright and do what the people want? this in turn should be the PEOPLE'S car company.

consolidate to one company, this will require only ONE management team.

hire talented CEO's, CFO's with good taste and talented designers with good taste. Develop many different new cars to cater to customer needs. Mimic toyota.

KEEP the labor force or add into it, we need to keep all jobs to keep economy going. We don't need 3 different management teams.

every tax payer will own an equal amount of stake in this car company, company does good, stock goes up.

this company will FLY!!! why u ask ? because we will be buying the cars! we own the company!!

FUK THE CORPORATE BIG WIGS WHO SCREW FISTED THE ECONOMY.
 
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