It has been public knowledge that GM is considering selling its Allison Division, makers of the Allison Transmission http://www.allisontransmission.com/
Allison has been and is a profitable division for GM so why GM would consider selling it, I wondered?
Could it be that that the money from the sale of Allison would bring extra cash flow to aid GM in its purchase of Chrysler?
We do know that they are others seriously considering the purchase of Chrysler also, including, equity groups like Cerberus Capital Management LP and Apollo Management LP
Equity groups are not automakers. It seems the logical step for them would be to take Chrysler into bankruptcy and then sell it piecemeal.
However, a big hurdle for any buyer is Chrysler's estimated $19 billion long-term liability to pay health care benefits for unionized retirees.
This factor alone, some analyst say could necessitate Daimler-Benz AG to practically give Chrysler away
Which is an advantage to any buyer
Nevertheless, liability to pay health care benefits for unionized retirees is where GM has the advantage over Cerberus Capital Management LP, & Blackstone Group and any others interested in purchasing Chrysler.
GM is a known to the Union, and one hand DOES wash the other, the management companies are total unknowns to the Union.
GM and the Union have a long-term working relationship and could easier negotiate with the Union to eliminate health care liability and keep Chrysler in the hands of automakers instead of the management companies, which would most certainly be more favorable to the Union and its membership, and the Union knows it.
Maybe Rick Wagoner has a copy of "Barbarians at the Gate" on his bedside. After all GM managed to out maneuver the old fox him, Kirk Kerkovian and his plan to profit off GM.
Perhaps the sleeping giant has awoke after all
Like Dylan said, The times, they are a-changing'
Personally, I am rooting for GM. And Chrysler
And the plot thickens....
Maddie the Wonderdog
"See the USA in your Chevrolet!"
"No freeman shall be debarred the use of arms "
--Thomas Jefferson: Draft Virginia Constitution 1776. Papers 1:353
Dylan, Bob, “The Times They Are A-Changin’” The Times They Are A-Changin’ Atlantic, 1964.
Burrough, Bryan, and John Helyar. Barbarians At the Gate. Harpercollins Publisher, 1990.