GM - Like a Rock.

Several years ago, GM had a tag line in their advertising for trucks and SUV's: "Like a rock". How ironic that years later this could be applied to their fortunes: sinking "like a rock".

As bankruptcy looms as early as next week, bond holders are being vilified. Why? Because they chose to buy bonds from-or make a loan to - GM, who promised to pay them back? The nerve! Imagine loaning money to a former blue-chip US company and expecting them to pay it back!

The numbers are staggering. GM will need nearly $100 BILLION to keep viable. At what point does capitalism take over and we cut our losses? No-one is indispensable and that goes for corporations too. For years, we were eager to tell foreign countries to open up and let their markets grow through capitalism. That works fine there, as our companies gobbled up local concerns or ran them out of business - entirely legally and through the forces of capitalism. Now the shoe is on the other foot, we are sinking every dime we have - and don't have - into ailing automakers insisting that we can't let them go out of business. Why not? What's good for the goose is good for the gander.

Letting GM go under might be very painful. But it has been a while since we have felt the sting of real pain, and as they say, no pain no gain.

Chrysler: Fiat or Bust.

As you all know, Chrysler filed for bankruptcy last week. The reorganization looks like a nightmare from 1970's Europe: Unions in charge, and a minority shareholder who hopes to salvage the company. Fiat is in a massive global power grab which includes GM's German Opel and British Vauxhall units and may even include Saab. You can't say the Italians are not daring. The British and Germans are reluctant, for purely xenophobic reasons, to accept the idea of Italians running their major car manufacturers. They are also afraid of job losses, which may be inevitable anyway, if GM goes the way of the Dodo bird. The latter may be the reason that Fiat agreed so readily to the huge stake the UAW is taking in Chrysler: if Fiat is good for unions in America they may be good for unions elsewhere - and unions count in this industry.

The question still arises if Fiat has the depth of management to take on such a huge spurt of growth. Chrysler alone has sapped billions from its last two owners, namely Daimler Benz and Cerberus. The red ink shows no signs of slowing for Chrysler. Years of sub-par quality, an ageing product lineup and deep discounts will take many years to remedy. Yes, fresh new Fiats will increase traffic in showrooms, but if these products do not shine, they will merely add to the woes of Chrysler. And if Chrysler's passenger car offerings continue to age and decline, there will be little point in attracting car buyers to showrooms filled with new Fiats and old Chryslers. The Fiats MAY sell, but the Chrysler woes will continue.

For Fiat, the current power grab is an all-or nothing gamble. As such, little changes for Chrysler except that it has one last, tenuous lifeline.