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Ceribus Hemi
May 14, 2007 3:34 PM   Subscribe

Magna International has failed in its bid to purchase Chrysler, losing to private-equity firm Cerberus Capital Management LP Bloomberg video: Canadian Auto Workers union president Buzz Hargrove (wmv) fears further job cuts.
posted by acro (26 comments total)

 
I'm telling you, it's the Jeep curse. Every company to acquire Jeep will go down in flames.
posted by The World Famous at 3:42 PM on May 14, 2007


MetaFilter: American car company faces extinction; here's what the Canadians think.
posted by phaedon at 3:45 PM on May 14, 2007 [1 favorite]


This thread is nothing without [IMG] tags:

O RLY?
YA RLY
NO WAY!
posted by Smart Dalek at 3:46 PM on May 14, 2007 [1 favorite]


This is like the top frickin' news item everywhere.
posted by Ethereal Bligh at 3:48 PM on May 14, 2007


Daimler lost billions and billions--why did they buy them anyway?
posted by amberglow at 3:52 PM on May 14, 2007


Jesus Chrysler!
posted by porn in the woods at 3:53 PM on May 14, 2007


why did they buy them anyway?

1. Diversify
2. Synergize
3. Jeep
posted by phaedon at 3:56 PM on May 14, 2007


CBC "Average profit per North American-made vehicle (US$): DaimlerChrysler: $186
posted by acro at 3:58 PM on May 14, 2007


I knew that plucky aardvark would win out in the end.
posted by dhartung at 4:05 PM on May 14, 2007


why did they buy them anyway?

1. Hubris

2. Stupidity

3. They figured Mercedes' quality was too high, and that if it wasn't taken down to somewhere below Nissan level, the universe would soon implode. The best way to ruin the quality of the company reputed to have the highest quality in the world was to merge it with the American company with the worst possible quality and the slimmest per-car profit margins. The icing on the cake was when they canned all of the American brass and moved a bunch of German execs to Auburn Hills, since that's the perfect way to boost morale both among the U.S. employees and the German execs who got to move to Southeastern Michigan.

Because when you have a big, strong car company with lots of money and great cars, the best move you can make is to merge with a crappy, weak car company with no money and terrible cars. It restores balance to the universe. And so it goes.
posted by The World Famous at 4:12 PM on May 14, 2007 [6 favorites]


Simply looking at the numbers is astounding:

Daimler spent $36 billion to pick up Chrysler originally. If you look at this deal, it actually turns out that Daimler is spending $650 million to get rid of Chrysler. (Daimler retains somewhat less than 20% ownership.) Effectively Daimler is writing off that original investment completely.

I think that this one transcends even the AOL/Time-Warner merger in terms of utter stupidity.

Ten years from now, my guess is that there will only be one major car maker left in the US. But given how much trouble all three of them are in, I wouldn't want to guess which it is.

What I do expect is that all of them are going to do what the airlines all did: declare Chapter 11 and get bankrupcy the court to relieve them of their current union contracts.
posted by Steven C. Den Beste at 4:52 PM on May 14, 2007


Ten years from now, my guess is that there will only be one major car maker left in the US.

Umm, would that be Toyota?
posted by pax digita at 5:01 PM on May 14, 2007


Over the last year, DaimlerChrysler layoffs in Windsor, Canada across the border from Detroit affected 1300 jobs; two Ford plant closures cut a further 1000 jobs...

Cerberus hired "former Chrysler COO and Volkswagen executive Wolfgang Bernhard as an automotive adviser"


Health care obligations for Chrysler employees and retirees are estimated at $19 billion.
posted by acro at 5:19 PM on May 14, 2007


it actually turns out that Daimler is spending $650 million to get rid of Chrysler

Ditto. As they said on ATC tonight, 'it's like paying someone to come and haul away the broken-down car in your front yard' (sic).
posted by datacenter refugee at 5:21 PM on May 14, 2007


Steven: You are probably correct, and if the airline market is any sort of bellweather for a highly mature marketplace collapse, I'd lookout for richard branson's "virgin cars".
posted by Freen at 5:22 PM on May 14, 2007


virgin cars

Dammit, I drove one of those through most of high school and I'm not going back.
posted by maxwelton at 5:39 PM on May 14, 2007


I'm wondering if the Big Three are going to ramp up the lobbying effort to get single-payer health care so corporations can get out from under the obligation. I just realized it was about 17 years ago that I first heard the anecdote that GM pays more for health care than for steel.
posted by pax digita at 6:10 PM on May 14, 2007


MetaFilter: American car company faces extinction; here's what the Canadians think.

More cars are built in Ontario than any other jurisdiction -- that is, more than any US state (including Michigan) or Japanese prefecture or German state, etc. It's a really big deal here.
posted by winston at 6:46 PM on May 14, 2007


Buzz Hargrove is a twat. I've been thinking that for a long while.
posted by unSane at 6:54 PM on May 14, 2007 [1 favorite]


Health care obligations for Chrysler employees and retirees are estimated at $19 billion.

Which means paying someone less than that to buy it was a good deal, in the end.
posted by smackfu at 7:21 PM on May 14, 2007


Reality once again copies a Simpsons episode; I believe Mr. Burns also got the Germans to pay him to buy back his nuclear plant. Silly Germans, always underestimating America's ability to do something shittily.

USA!

(and seriously: Cerberus? The three-headed hound of hell is into investments? What's next, Satan, Ltd.?)
posted by emjaybee at 7:28 PM on May 14, 2007


By the way: Russian billionaire Oleg Deripaska buys into Magna. This was just before Magna's bid for Chrysler failed.

Globe and Mail background stories:

The Russian oligarchs

Russia Inc. Is Canada ready?
posted by russilwvong at 8:21 PM on May 14, 2007


Russia Inc. Is Canada Ready? Allen Stewart from Vancouver, Canada writes: It is a vast right wing conspiracy led by the communinsts.
* Posted 12/05/07 at 9:34 AM EDT

posted by acro at 9:09 PM on May 14, 2007


At least now the word 'Chrysler' will no longer be gloating over Potsdamer Platz.
posted by Flashman at 3:33 AM on May 15, 2007


Cerberus is not out to bail out the automaker for the good of America.
posted by acro at 8:38 AM on May 18, 2007


Both Daimler and Cerberus have made significant financial commitments to strengthen Chrysler pensions. Daimler has agreed to provide a guarantee of $1 billion to be paid into the Chrysler plans if the plans terminate within five years," PBGC interim director Vince Snowbarger said in a recent statement.
posted by acro at 7:38 AM on May 21, 2007


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