Private Investors Could Aid GM-Chrysler Merger
General Motors and Chrysler are likely to merge, no matter how crazy this idea seems on the surface. Both companies are financially beleaguered, suggesting that the combined entity would have an even greater chance of failing than if the two automakers were to go it alone.
Federal intervention to the tune of a multi-billion dollar loan and aid package will likely expedite the sale. Certainly, the United Auto Workers (UAW) union will have a say in the merger especially as tens of thousands of Chrysler workers will likely be unemployed as a result of this business deal. On the other hand, Chrysler may not have any leg to stand on if GM doesn’t come to the rescue, suggesting that the UAW may have to hold its nose on this one and accept whatever is being offered.
Along with federal help, private investors are beginning to warm up to a GM-Chrysler merger and could play a significant role in the company going forward. As GM gains access to low cost loans and is able to offload poor performing assets with government backing, a leaner and much more efficiently running General Motors is suddenly much more appealing than the current bloated corporation.
For its part, General Motors has several things going for it that make it an attractive buy, especially as stock prices hang around at historically low levels. These attributes include:
Size - as the second largest automaker in the world, General Motors’ strength could lie in its diversity. The company is very strong in several Asian markets, particularly China, and has seen strong growth in Latin America, Australia, and throughout the Pacific Rim. Sales are down in Europe and North America, but as the economy begins its rebound in 2009, GM’s fortunes in those two markets is expected to change.
Technology - no one is quite sure just how well GM’s electric car technology will turn out with the Chevrolet Volt, but a lot of investors understand that if it does succeed, it’ll be a game changer for the industry. Featuring lithium-ion technology, a successful Volt will find that technology spreading to vehicles across the GM spectrum including cars built in Europe, Australia and the Americas.
Future - No smart investor will put his money in a company they don’t think will be around for the long haul. With new technologies coming online, old plants closed, and a trimmed down workforce, a renewed GM will be freed from past encumbrances, enabling it to move forward using its renewed role as the world’s largest automaker to set the trend for the industry.
Of course, any merger is fraught with problems including GM management screwing things up royally as some contend they’ve been doing all along. Still, when your back is to the wall and both the federal government and private investors are willing to help out, then moving forward under these conditions may be the wisest move to take. (Source: The Detroit News)
| Matthew C. Keegan is a freelance writer who resides in Cary, North Carolina. Matt is a contributing writer for Andy’s Auto Sport an aftermarket supplier of quality parts including custom Chrysler Crossfire mufflers and Chrysler LeBaron body kits.
Article Source: http://EzineArticles.com/?expert=Matthew_Keegan Your Thoughts ? |
Tags: Auto Dealers, Chrysler, GM
November 21st, 2008 at 3:34 am
All companies exporting products or services to the European Union (EU) may someday be contractually required to have ISO certification to sell into the market. Even today, contractual requirements are finding their way into purchase orders for products manufactured in Japan, the United States and elsewhere. Currently, the requirement for ISO 9001 registration is clearly market-driven. Officials in the EU are considering mandatory regulatory requirements relative to registration. This is especially true in regulated industries, such as medical device manufacturing and telecommunications. For example, as of the summer of 1998, a business is not allowed to sell medical devices in the EU, unless a Notified Body certifies their quality management system and / or products.