Tuesday, May 15, 2007


How am I supposed to feel about Chrysler being sold by Daimler to a private equity firm named after the three-headed dog that guards the gates of hell and led by Dubya's former Treasury Secretary? A few thoughts:
  • Why can't American business make money in its flagship industry of the 20th century, automobiles? Chrysler first went broke in 1979, during the Carter Administration, and has been up and down my whole adult lifetime.
  • Does innovation have anything to do with profits? Chrysler has been more creative than the other Big 3 and it hasn't helped.
  • Daimler is getting $7.4 billion minus some costs for a car company it bought for $36 billion in 1998. Holy cow! How much money do you have to lose before you say "sorry, we're idiots! And not just us, but all those other executives, equity kings, and M&A lawyers who think just like us!"
  • Writing in today's Wall Street Journal, Gregory Zuckerman et al. have probably gotten at the real story - Cerberus the 3-headed dog wants Chrysler's auto loan business. America may not make anything anymore, but we are good at charging points.
  • Will the business press ever stop saying "synergies and efficiencies" about mergers and acquisitions and say "monopoly power" or at least "market dominance"? The euphemisms make everybody dumb.
  • Will the 3-headed dog chew Chrysler employee health benefits to the bone? Several reports say Daimler didn't want to hack the company's liabilities there. Can America afford health care for the non-rich?
  • Meanwhile, Bob Herbert reports in the NYT that half of all US workers have no paid sick leave, 80% of the bottom quarter by income have none, and 86% of food service workers have none. Herbert concludes that worklife for most US workers is stuck in the nineteenth century.
He's right. And so it goes.

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