Heh...Legion, see my last question.

C'mon Dave, I know you want to help the kid out, but you know that division, and any conflict of interest business, could be spun off faster than Britney Spears is back in rehab. When I parted my Targa, I made nearly twice as much as I would have if I had sold the car whole.

Did you invest in Cerberus because you think they're dummies?:D

For the record, I'm not invested in Cerberus. I don't have enough cash lying around to buy any of their shares. Wish I did!

Cerberus excels at creating and/or enhancing value - often by buying extremely undervalued assets and repackaging them more attractively. Nothing revolutionary, just requires really smart industry professionals and boxcars full of cash (they've got both in spades).

Question - were any Chinese companies submitting bids to DC? If not, why? And if they were not, why would they approach Cerberus now? They could've bought much cheaper from DC. We can speculate all day about fragments being auctioned off to China, but I am trying to come up with reasons why such a scenario would be "likely". I can't come up with too many that really make sense.

First thing is that I think they'll try to make some large cost cuts and try to return the business to profitability. Is there a huge record of these guys breaking up companies? I don't believe so. There's a reason they bought this company - they saw extraordinary value where no one else did. How they extract that value - well, that's what my popcorn and Coke are for, I can't wait to see how they do it.

Let me spell a few things out before heading off to the local hardware store.

1. Why do we have a reasonably robust economy while in a time of war and tax cuts?

Answer: we're paying for the war with money borrowed from China. that means they are our bankers. that means we have willfully subjugated our economic and foreign policy negotiating ability to the Chinese. Draw your own inferences when they do something we don't like, or want to do something not necessarily in our best interest.


2. Who got China entry into the WTO?

Answer: George Bush and the U.S. Congress. You think China doesn't have the best lobbyists your U.S. tax dollars can buy?


3. U.S Manufacturing. If China had a trade war with the U.S., who would come out ahead? Who would cry uncle first.

Hint: The U.S. is analogous to the UAW. We need them more than they need us. See bankers above.


4. The outcry of the American public?!

Answer: $9,000 cars. they might even throw in a chicken.

I'm scrapping 5-2000...gotta run.

China has been on a buying binge of American brand assets for 3 years now.

China wants to sell cars in the U.S. They would be extremely smart in buying someone's "project."

Put another way, what's the best way to build a track car? Buy someone else's project. Cerberus purchased Chrysler for pennies on a dollar. The Chinese will buy it for 10 cents on a dollar. Everyone wins.

Cerberus is just going through the motions now to keep labor happy, etc. In the end, the best business decision they could possibly make is selling chunks at a time to very interested parties. they only care about making money. that's it.

I am finding this thread reminiscent of FastPat's methodology of coming out strongly with some inflammatory story or remark with the intent of purely creating 'mutiny' on the PP board. This approach coupled with nonsensical retorts similar to CK's leave me wondering if this union proponent could actually see the world twisted in this contorted fashion. Regardless, I see no actual content in his musings and I am sure that behind closed doors the 'brain-trust' is working on coming up with witty replies to this thread for this evening - you know, the one's that tell us again how unions are such a good deal... With the foolish activity of late, it is rather apparent that crow will be served soon.

You'd be right, except that you're one president off.

September 17, 2001
http://www.wto.org/english/news_e/pres01_e/pr243_e.htm


Clinton gave it most-favored trading status.

if Bush weren't on vacation or focusing on missile defense his entire first 8 months, China would have been denied entry into the WTO.

Hmmm....what could have happened six days before that would be a little distracting....?

Shaun - you're focusing a little too much on geopolitical conspiracy theory and coming up short on facts. I don't see a value proposition for the Chinese here. They've already got their ducks in a row with their own automotive industry - Cherrys are coming soon, and the price tag alone will sell them (anyone who doesn't believe we'd sell out for low price alone has clearly never tried to get a parking space within a mile of Walmart on Saturday). I don't think the Chinese have any real business need to spend hundreds of millions to obtain the Chrysler brand in order to sell cars here.

GM and Ford are starting to show signs of life. For the first time in my adult life I am starting to see positive reviews of GM products (other than the Corvette) in my car rags. Chrysler was creating excitement in their brand though I'm not sure the quality was there yet (what I've seen of resale values was frightening). There's a possibility that Cerberus will just turn them around - they didn't hire former industry execs for nothing. Not required for a dismantling effort. Remember, these guys have enough cash to wait out a turnaround in the company - their standard MO is not necessarily to do an 80's style buyout'n'breakup. Again, how much have you read up on these guys?

Completely disagree Dave and my math proves my position. It's cheaper to buy an infrastructure than to build one, AND, you get an American name brand with tons of equity, trust and assorted "goodwill" built in to put along side your cars. Put a price tag on that! Time-value of money...a few hundred million is CHEAP. Unless you think China can ship over tab A into slot B dealerships, complete with all the zoning requirements and paperwork fulfilled.

It would take China 10 years to duplicate the network. It will take 2 years to add their cars to the network. Take a staffing point of view...what's better: train Chrysler mechanics to work on Chinese cars or find, hire, train an entire nation of Chinese car-trained mechanics.

My math works.

Jesus Christ Chris, do ya really think it took between Sept. 11 and the 17th for China to get its ducks in a row for approval into the WTO? :rolleyes::rolleyes::rolleyes::rolleyes:

Shaun the infrastructure is already in-place in China.

Dealerships are easy. Not sure how it is up there but around here we have auto 'malls'. New brands like the Koreans have had no problem getting floor space. Suburban areas like where I live would be a no-brainer due to this and would allow them to establish huge initial footprint for minimal investment.

Re: buying an American "name":

Cuisinart was once the premiere kitchen appliance manufacturer. My dear deperted wife had a kitchen full of Cuisinart projects. Recently, her Cuisinart can opener (a hefty little bugger) actually broke in a way that was impossible to fix at home (less than a year old). I sent it to Cuisinart headquarters with a letter, saying in part that this must be an outstanding example of superior Chinese manufacturing and to either fix it or use it for a doorstop since it was useles to me.

The more companies that are gobbled up, the shoddier the things we will get in return.

Dave, you are minimizing barriers to entry, start-up cost and time in your analysis, while not factoring in all the benefits of owning an existing network that people trust, heck, they even already know where it is.

Cerberus will part out a car past it's prime. China will buy someone else's project.

All things considered, the conjugation of these two scenarios makes the most business sense for both parties.

A wager? Oh *****, wait - I don't want to become the subject of a social experiment.

We'll have to agree to disagree. The analysts thus far are with me. Let's see what the next couple years hold. My vote is on turnaround and IPO.

You already are Dave! and with that, I know I've done my job well.

Now you sound like Superman (and what the hell are you talking about?)

Whenever my welching on the bet with Joe is brought up, it's like a little signal.

(but you aren't part of a SE, I just just funning there.):p

Heh, sorry, but yeah that one will always be tough to live down. Call it a cost of re-entering OT. Sorta like the Chinese trying to enter US car market. Painful, and of questionable value.