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October 12, 2008

GM-Chrysler merger talks — show me the money

As I predicted when I blogged about the GM-Chrysler merger yesterday, GM would need a LOT of money it doesn’t currently have to buy Chrysler from Cerberus Capital.

And, analysts say that by the time economies of scale kick in, it could be too late for both companies.

I’ll go further — two American carmakers merging with each other like this would likely hasten the demise of both.

(Standard & Poor’s analyst Robert Schulz said Friday all three of the formerly-Big Three could be forced into bankruptcy.)

And, we the public would be on the hook for a huge portion of those $25 bil in guaranteed formerly-Big Three loans.

If I were a private investment bank, I wouldn’t lend GM a plugged nickel, let alone real money.

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