GM (GM) and Chrysler want to get married, but both are too poor to buy the other out. So they want another bailout (the $25 billion in guaranteed loans wasn’t enough, apparently). Can’t blame them for asking, obviously. But the madness has to stop somewhere.
The American car companies are floundering. Dragged down by the twin concrete shoes of colossal pension and benefit obligations and a congenital inability to design cars that Americans love (cars, not trucks), they are mediocre companies in good times and hairballs in bad.
GM, Ford, and Chrysler won’t bring the economy down if they go bankrupt, and they won’t even stop making cars. They’ll just do what they should have done 20 years ago, which is radically reorganize. So it’s time to let go of the nostalgia of the 1950s, and just let GM (GM), Ford (F), and Chrysler go down.
G.M. and Chrysler’s majority owner, Cerberus Capital Management, are said to be committed to a merger of the two troubled automakers but have yet to line up financing to inject more cash into the companies.
But investors are hesitant to put money into the deal without federal assistance in some form, possibly a direct loan or an equity stake, said people close to the talks who spoke on the condition that they not be named.