Chrysler is said to be emerging from bankruptcy today to be swallowed by Fiat. This is a cashless transaction where Fiat converts equity in Fiat for the purchase price of Chrysler. And some folks will say, "swell".
GM enters bankruptcy today, ostensibly to clear the cancerous brands, Saturn, Pontiac, Opel/Vauxhall, Hummer, and Saab, from the books. The Canadian parts firm Magna has entered an agreement with the German government to purchase Opel (which saves Vauxhall). There has been a series of suitors for the Saturn brand (the brand NOT the products ; -) as well as the Hummer brand.
But, the road to recovery for both Chrysler and GM will be long and fraught with additional peril, especially while the economy continues to under perform. In the long run both will be mere shadows of their former selves.
Monday, June 1, 2009
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