The U.S. government has pumped more than $100 billion into Detroit over the past year to keep automakers General Motors and Chrysler alive. But some of the sector’s remaining capitalists are having a hard time stomaching a $25 billion Department of Energy loan program intended to spark new developments in electric cars.
It’s a puzzle M&A bankers and corporate executives have been trying to solve for years: how far from your home market can an acquisition take place and ultimately stumble over cultural differences? It’s a question that looms large as quintessentially Italian automaker Fiat prepares to swallow up Chrysler — inventor of the K-car and the minivan — and which reportedly haunts St Louis-based employees of Anheuser Busch in the aftermath of their company’s takeover by the penny pinching Belgians and Brazilians at InBev.
Now comes the waiting, which, as Tom Petty can tell you, is the hardest part.
Now that General Motors Corp and Chrysler LLC have filed their plans of reorganization to the U.S. government and have started what looks like a long and not-painless process to make themselves smaller, more profitable and better suited to the current U.S. demand for new cars.