An offer they can’t refuse
You can almost hear the outrage machines coughing and spluttering to life in Congress. GM and Chrysler‘s latest bailout requests, though well telegraphed, will be reviewed by their own special branch of government – call it the Car Komintern, perhaps, since it took over from the Car Czar concept. But legislators who are concerned that they are being bullied into throwing good money after bad will have plenty to say about the nearly $22 billion in additional government loans the automakers say they need.
The sum is nearly $5 billion more than the automakers have already received from the Treasury. And despite having provided more detail on how the money is to be spent, the industry’s viability is intrinsically linked to economic recovery. There is no Car Czar, and there certainly is no Economy Fairy.
The Detroit Free Press argues that the automakers are being a whole lot more candid about what they plan to do with the funds than the banks were when they got bailed out. And politicians supporting the automaker rescue may be able to get a lot more mileage out of the dangers of bankrupting the Midwest labor force than Wall Street has gotten convincing America that bankers deserve subsidized golden parachutes and bonuses for running their companies into the ground.
One thing Detroit should have learned from Wall Street is how to scare Congress. According to GM and Chrysler, the cost to the government of financing a bankruptcy of both could be nearly $125 billion.
Other Deals News:
* Japanese trading house Mitsui & Co is among potential bidders for Teck Cominco’s Elk Valley metallurgical coal operation in a deal that could be worth roughly $2.5 billion, three sources with direct knowledge of the matter said.
* Australia’s Pure Energy unanimously recommended shareholders accept Britain’s BG Group’s sweetened offer of A$995 million ($637 million), or A$8 per share, aimed at trumping a rival bid linked to Royal Dutch Shell.
* Aquarius Platinum plans to make an all-share bid for Ridge Mining valuing the firm at 63.9 million pounds ($90.37 million) to expand its resource base and output.
* British-based newspaper publisher Mecom said it had agreed to sell Norway’s Sunnmorsposten and Romsdals Budstikke daily newspapers to Polaris Media for an enterprise value of about 55.9 million pounds ($79.1 million).
* Russian billionaire Oleg Deripaska has no plan to sell his 25 percent stake in Austrian builder Strabag, an official at his investment vehicle Basic Element (BasEl) said. “We have not taken any decision about selling out of Strabag,” he said following a report in an Austrian newspaper that indebted BasEl could sell its stake to Strabag’s other shareholders.
* Shares of Air Berlin sold by U.S. investor Len Blavatnik are parked at investment bank UBS and are for sale, Handelsblatt reported, citing industry and financial sources. It was not immediately clear if UBS had bought the stake from Blavatnik or was acting on behalf of another seller.
* Canada’s Bank of Nova Scotia has expressed interest in buying a stake in Thailand’s Siam City Bank (SCIB), the Nation newspaper reported, quoting an industry source.
* Australia’s Fortescue Metals Group said it has held talks with Anglo American and China’s sovereign wealth fund about possible investment opportunities, and sources said top Chinese steel maker Baosteel has also been in talks to buy assets.
* British venture capital firm 3i Group cut its stake in IT consultancy group Morse Plc to less than 3 percent from about 15 percent, a regulatory filing showed.
(PHOTO: General Motors Chairman and CEO Rick Wagoner addresses the media during a news conference at GM World Headquarters in Detroit, Michigan February 17, 2009. REUTERS/Rebecca Cook)