ANY BIG CRISIS generates big reactions, in expectation of the best results. This is the clear target of the tratativas initiated between big American self-propelled companies General Motors (GM) and Chrysler, a possible merger. Of materializing, the above mentioned union would be historical and it would consolidate the position of GM as global leader of sales, which in the last twelve months was on the point of losing before the Japanese corporation Toyota Motor. How we spread in his opportunity, GM and Toyota concluded in 2007 virtually equalled in the sale of vehicles on a global scale. Nevertheless, so that General Motors could acquire his rival Chrysler LLC with all his problems, it would have to obtain cash desperately:“ A lot of money”, the analysts of the industry agree. The big problem is that both self-propelled manufacturers cross difficulties for surviving in the middle of the descent of the sales, a slowed down global market and a credit crisis without precedents. But as they say that the executives, where there are big problems it is necessary to find big solutions. Even more if it is born in mind that a decision of this type might save money on having combined management, engineering, manufactures and clerical staff.
IN SEPTEMBER the conversations began, by no means I secrete, between GM, founded 100 years ago, and Chrysler, founded 83 years ago. The newspaper New York Steal he thought that his sources said that the possibilities of a merger are "of 50 per cent". In an e-mail, the spokesman of GM, Tony Cervone, alluded to the report and said that “without reference to this specific rumor, how we usually say often, the GM officials analyze in routine form topics of mutual interest with other car companies”. In another e-mail, the spokesman of Chrysler, supported that “the company analyzes several potential global alliances while he explores the growth opportunities in the whole world. In addition to the already announced alliances, yet, Chrysler has not concluded new agreements and they do not have any more announcements to be done in these moments". What is not clear is still if the majority associate of Chrysler, Cardinal Cerberus Management LP – that 80.1 per cent of the actions possess - would be ready to pay or if the federal government might interfere in one or in both companies. Let's hope how there advance these negotiations, which end can be of big impact for the automotive industry of the country.
THE FORMULA ONE attracted our attention on Sunday, the 12th, after there was disputed the antepenultimate Big Award of the period, that of Japan. The career was angered, full of emotions, where the rivalry between the favorites Lewis Hamilton – current leader of the world cup - and Felipe Massa went out to re-shine from the first return. Both hit in two occasions and the pilots were punished by his maneuvers, which the judges considered to be illicit. In the end, the victory him smiled, for the second consecutive time, at the Spanish Fernando Alonso, at rudder of his Renault. But the previous incidents did not stay there and Hamilton accused Massa (Ferrari) of hitting deliberately his racing car McLaren. Two more careers stay in the calendar, one in China this Sunday, the 19th and the last one in Brazil. The emotion does not end and it will be necessary to wait up to the last return.
Up to the next one,
Vctor Caycho
Publisher of Autoguide
E-mail: vcaycho@msn.com
www.hwc-md.org
| Negotiation impresses the automotive industry |
| General Motors and Chrysler analyze his possible merger |
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The news about the anticipated closing of the plant of GM, in Janesville (Wisconsin), was known the same day (Monday, the 13th) in which GM and Chrysler were confirming to themselves the versions about a possible merger between.
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Tom Krisher
Detroit / AP
General Motors Corporation, Chrysler LLC and Cardinal Cerberus Management LP talked on a possible merger or acquisition of Chrysler on the part of GM, according to a person familiar with the negotiations.
But if GM wants to acquire Chrysler LLC and all his subsidies, he would need desperately a lot of money, said analysts. And that in the current environment might be problematic.
Now when both companies try to survive in the middle of a decrease of the sales, the world economic crisis and the historical fall of the credit market, there is not known if the majority owner of Chrysler, Cardinal Cerberus Management LP, would be ready to cover the costs of an acquisition or if the federal government would intervene to save to one of the companies … or perhaps to both.
" There has to be more for GM that only Chrysler", affirmed Erich Merkle, analyst of the automotive industry of the signature Crowe Horwath LLP, company of accounting and consultancy. "If you join two self-propelled companies, which are losing money and market share, what you will obtain is a self-propelled company that will lose market more quickly and will lose more money", it augured.
Chrysler, property in 80,1 per cent of Cerberus, already has a joint enterprise with GM to make transmissions destined for hybrid vehicles of gasoline and electricity, and he analyzed the full merger or acquisition on the part of GM, added the person, who does not want to be identified because the negotiations have not been announced publicly.
Years of waiting
Although the merger would save money to them on having combined managerial structures, of design, manufacture and administration, the analysts said that it would bring I obtain more costs and it might take years seeing the first fruits of the agreement. And it might come too much late.
Chrysler, with head office in Auburn Hills, has lost at least 510 millions of dollars during the first trimester of the year and 1.600 millions during last year. His sales fell down 25 per cent this year, in the worst fall for any company of the branch.
For his part, GM, of Detroit, loses more than 1.000 millions in cash every month, what will lead her to reaching his minimal level of operative capitals of 14.000 millions, next year. The sales have lowered 18 per cent and the company has lost 57.500 million dollars during the last 18 months, principally for accounting costs.
All this happens in the middle of the biggest fall in sales in the United States of last 15 years, with the possibility of the bankruptcy for the principal self-propelled three of Detroit if they do not recover soon.
GMAC in the dance
The daily financier The Wall Street Journal, who quoted persons familiar with the conversations, indicated that Cerberus, a private enterprise of investments that has also a participation of 51 per cent in the branch GMAC Financial Services, proposed to change the self-propelled Chrysler operations to GM in exchange for the fact that GM supports a participation of 49 per cent in GMAC.
The newspaper The New York Times, which it mentioned the same way to persons familiar with the negotiations, informed that the self-propelled companies manage a merger.
GMAC, who finances principally the vehicles acquisition, is provided the same way with an important mortgage operation that has turned out to be negatively affected by the crisis of this sector.
