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October 22, 2008

Sorting through the automakers' mayhem

It's gut-check time in Detroit, as the highest-stakes game of chicken in automotive history hurtles forward.

What will become of Chrysler? And of General Motors, for that matter?

Chrysler's 80% owner, Cerberus Capital Management, desperately wants out of car and truck manufacturing, and will soon sell Chrysler to GM, merge it into the Renault-Nissan alliance, break it into pieces and pawn them, or just crash the Auburn Hills automaker into bankruptcy court.

GM, careening toward insolvency itself, sees in Cerberus-Chrysler a wad of cash that may help GM buy enough time to see the promised land of 2010, when the U.S. economy is stronger, when retiree health care costs shift to a UAW-run trust, when the electric Volt and other hot, new cars hit the market.

Cerberus would prefer to dump -- er, trade -- Chrysler and some cash to GM in return for the 49% of the GMAC finance outfit still owned by GM. But to make the numbers work, GM would have to vaporize a bunch of plants, scores of Chrysler, Dodge and Jeep dealers, and 30,000 jobs -- quickly and ruthlessly.

Continued:Sorting through the automakers' mayhem | | Detroit Free Press

Lastly, we have the wizards of Cerberus, CEO Steven Feinberg, chairman and former U.S. Treasury Secretary John Snow, and their handpicked guy to run Chrysler, former Home Depot CEO Robert Nardelli. They vowed a long-term effort, virtually a patriotic crusade, to revive and grow Chrysler.

That was just a year ago. Nice job, guys.
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