One way to shrink a bailout…
Each day that goes by without a Detroit bailout, the Dwindling Three get smaller. Chrysler is shutting down production for at least a month, and The Wall Street Journal reports that the company is again negotiating with GM about a merger. GM, which is denying it is talking again with Chrysler, slashed its Q1 production target by 60 percent and said it would temporarily idle about 30 percent of its North American assembly plant volume.
On his way out the door, U.S. President George W. Bush went on Fox News and talked about how seriously he was looking at a bailout, which is shaping up to be one of his last acts as president. Treasury Secretary Hank Paulson, who if nothing else opposes a bailout being funded from the TARP money set aside for banks, is behind the wheel. Moody’s said the chance of an automaker bankruptcy – prepackaged, coupled with government assistance – is now 70 percent.
Would it be cynical to note that each passing day may lower the price of a sector-wide bailout? What started as a request for $35 billion was quickly lopped down to $15 billion and is now widely quoted as somewhere closer to $14 billion.
Deals of the day:
* Goldman Sachs agreed to sell its 29 percent stake in Sanyo Electric after Panasonic slightly sweetened its offer, three financial sources said, clearing the way for a deal worth at least $6.4 billion.
* Lenovo, the world’s No.4 personal computer maker, said it had agreed with Brazil’s biggest computer maker, Positivo Informatica (PI), that an acquisition by Lenovo was not now possible.
* Insurance Australia Group said it had agreed to sell its mass market distribution businesses in the United Kingdom for around A$165 million ($115.2 million).
* The Osaka Securities Exchange, Japan’s second-largest bourse, said it bought a 76 percent stake in smaller rival Jasdaq for 5.3 billion yen ($60.7 million) in a move to consolidate Japan’s smaller bourses.
* French bank BNP Paribas said its plan to buy a stake in Belgium’s Fortis could no longer proceed as planned after a Brussels Court suspended it.
* Cisco Systems has sold 90 million China Communications Services shares at HK$4.36 each for HK$392 million ($50.6 million), trimming its stake in the Chinese firm by nearly half, fund manager sources said.
* French drinks group Pernod Ricard said it had agreed to sell several drinks brands to Arcus Gruppen AS to meet European Commission competition conditions related to its buy of Vin & Sprit AB.