By Lloyd Frazier
Since we are headed toward nationalizing our financial institutions, why not the domestic automobile industry? Let’s call the new bureaucracy the United States Cooperative Restructuring Administration of Automotive Providers – or U.S.C.R.A.A.P. for short. Hell, get Ford involved too. They are in the crapper, too. Wall Street is lapping at the trough. The Big 2.5 might as well get in on the action.
The sheer physics of two sinking objects merging to create buoyancy is preposterous. Cerberus Capitol Management and General Motors are both hemorrhaging cash like crap through a goose. Cerberus has been talking with Nissan/Renault for quite awhile now and nothing has come from that. Heck, maybe Nissan, Renault, Chrysler and GM should merge. It could be called the World Automobile Restructuring Team, or W.A.R.T for short.
All sarcasm aside, this is starting to become very interesting. Could the Federal Government be behind this push to merge? An interesting article from the Huffington Post states:
the outside motive…could be the Federal Government, which would inherit massive pension liabilities if either company went under. In exchange for taking on Chrysler, analysts envisioned that GM could be given access to low-rate emergency borrowing from the Federal Reserve’s discount window…
After taking on bad mortgages, the Feds would be hard pressed to take on pensions as well. So, maybe cash infusion to stabilize a GM/Chrysler merger makes more sense. I would hate to see a great American institution, automobile manufacturing, go the way of the Dodo. But again, who is really to blame? Just like the greedy Fannie Mae/Freddie Mac leaders driving the economy to the abyss, General Motors’ business decisions from previous decades has taken taken the same direction.
Comments are always welcome at AutoRamblings.com. What say you?