AAVR Magazine

So this weekend brought news that the talks are off between GM and Chrysler. Apparently someone found out taping together two bundles of IOUs does not magically make them bundles of cash. But, unflappable Cerberus (the howfarthemightyhavefallen owner of Chrysler) is right out there on the scene, reportedly in talks with Hyundai and striking up a convo with Nissan/Renault.

To me, it seems like Chrysler has become that middle-aged cougar at the bar — at one point attractive, even sexy, and now dangerous, desperate, ugly and toxic. The only reason anyone is remotely interested in Chrysler is to get their grubby paws on their cash and the Jeep brand, but then they look a little closer and realize the baggage. I’ve even heard rumors that the selling price could be next to nothing, since the new buyer would be taking on so many liabilities of health care costs and bad loans.

All of the 3 have bad news to report, Ford and GM are running out of cash, to the tune that they could be more successful throwing gold bricks out the windows of the renaissance tower than trying to sell cars. I think that the domestic auto manufacturers are in a difficult position. I would agree with anyone that the industry has too much capacity as a whole, but on the other hand, I would be really sad to see GM or Ford go (goodbye Chrysler). Any big hits to the big three would mean bad news for American workers, the union movement, and ultimately our economy. I have a tough time with this one. I believe that industries should have to correct themselves, and that lesser players should be weeded out. However, I also lament the sad state of the American industrial sector, and hate to see fellow countrymen lose jobs, just so in 10 years foreign entities can open non-union factories in the south and pay lower wages.

The problems are industry wide, Toyota, Honda and Nissan are in trouble too, but the difference is that our companies have been bleeding cash for years and can’t afford to. This economic slump came at a vital point in the turnaround plan of the big two.

It’s anyone’s guess what the fallout will be from this whole thing, what will the American automotive landscape look like? I doubt the government will allow the whole industry to go belly up, so will Joe Taxpayer be on the hook for bailing out another industry? I’m uncharacteristically concerned and dismayed about this.