Panic in Detroit? Chrysler Motors

The tongues are wagging full time in bars across Michigan State this week. Rumors of a potential merger between Chrysler and General Motors have been mentioned in the business sections of newspapers. No one really knows how far, what exactly has been discussed and what the outcome will be. Those who recall the original Chrysler buyout by Daimler-Benz in 1998 will remember the little shock waves when it turned out Chrysler's big buyout turned into a reverse take over by Daimler-Benz. We know now that merger didn't work out well as expected. The synergies between German high technology and American chutzpah were less than ideal. What do the two parties bring to the table this time around one wonders?
GM brings a staggering debt load to the tune of 1 billion dollars a month, a sales drop of 18% and top heavy management. Chrysler brings about $11.7 billion in cash and marketable securities along with a huge 25% drop in sales. With Cerberus as matchmaker, what can we expect to materialize? Talk of Cerburus taking a 49% stake in GMAC plus equity in General Motors stock has been suggested. Frankly, I expect to see a different picture considering GMAC's dismal performance in financing lately. Cerberus is a private group with a strong record in restructuring companies for profit achievement. A common method is 'harvesting' which is strategic management speak for selling off the underperformers for money and keeping the good parts of a large company for future profit grooming and later resale. In the case of Chrysler, it appears this will be a deal where GM is allowed access to Chrysler's cash in order to finance new models and research in exchange for solid shares in GM. There has been talk of eliminating the Chrysler franchise altogether and just keeping Jeep. Frankly, it's too speculative to consider that right now.
I believe the most likely scenario is two possible sales. Cerberus may spin off the Viper franchise to a sports car company and sell the rest to GM for some combination money swap and ownership deal. That's as far as I can venture. The future looks dire for Chrysler, that much is true. It doesn't bode well for GM when you check out their history of errors and mismanagement. If Cerberus gets hold of controlling interest, you can be sure some 'harvesting' will be done on the 14th floor. Panic in Detroit indeed!

1957 Pontiac Super Chief & 1955 Olds Holiday

While driving my GTO in town, I saw a parade of 5 vintage 1950s cars at the Georgetown A&W parking lot. All the hoods were open but there was no cruise night and no one was at their cars... I stopped and checked out the cars. They were excellent driving machines and all from Michigan, USA. It was the Cross Canada Cruisers brigade. They are a troupe of Christians touring the nation on behalf of their church to enjoy the summer and spread the Word. The Team East caravan comprised several cars including a restored 1957 Pontiac Super Chief sports sedan and a 1955 Olds Holiday two door hardtop. A Lincoln Capri, a 57 Chevy and other fine cars were included. The folks involved mentioned this was their last stop on the tour. They'd been on the road a few months and found the old chariots were reliable on the whole although there were a few trying moments, just like life. Considering how much rain we had, I'm sure they're glad to have chosen hardtop cars!
My favorite vehicle was the stunning 1957 Pontiac Super Chief four door hardtop.Finished in Coral and Gray two tone and equipped with 347 V8 engine with single Rochester carburetor, this restored car was only made from 1957-1958 as a mid range Chieftain model between the Chieftain and Star Chief series. This particular car was purchased in Concord, North Carolina from Mike Wallace Racing.
Another nice car present at the A&W was a two tone 1955 Olds Holiday two door hardtop. As part of the Cross Canada Cruiser promo material artist, Glenn Hayes, created a painting of classic car lover's dream. Two men ogling a 1955 Olds for sale in the country. On the roadside, a fully restored hardtop waits. The licence plate gives the theme of the painting away. Restoring your car(and soul).I love car paintings and artwork in general. Seeing these classics being used and enjoyed make me more happy than seeing someone buying a car just to flip for profit.