So, who has the most to lose if GM and Chrysler fail? UAW? Guess again?

[JDPriestly]

If GM goes, a lot of things go. GMAC could be hurt badly.

. . . .

GMAC, which has been forced to cover rising losses, wants to become a bank holding company so that it can tap funding sources including the Treasury Department's financial rescue program. But the company said in a securities filing that its investors are refusing to provide necessary financial support for the transformation, and that it will abandon the effort if the investors do not sign up by Friday.

Analysts said the company could be forced to file for bankruptcy protection if it cannot broker a compromise.

The consequences for car buyers, auto dealers and General Motors itself would be significant. GMAC, through September, still provided the financing for 80 percent of GM vehicles shipped to dealers and for 35 percent of GM vehicles purchased by customers. GM sold a 51 percent stake in GMAC to Cerberus in 2006.
. . . .

GMAC's problems began with the collapse of the housing market; one of its subsidiaries, Residential Capital, was one of the nation's largest mortgage companies. As the economy worsened, borrowers also started defaulting on car loans.

http://www.washingtonpost.com/wp-dyn/content/article/20...

A company called Cerberus Management owns 51% of GMAC. That same company owns 80% of Chrysler. So what is Cerberus Management?

http://www.hoovers.com/cerberus-capital-management/--ID__112328--/free-co-profile.xhtmlhttp://amlawdaily.typepad.com/amlawdaily/2008/12/gmac-o...

Cerberus also owns Chrysler

"Our goal now will be to prove that Daimler made a mistake because we're going to make successful." — UAW President Ron Gettelfinger, supporting Cerberus Capital Management's acquisition of Chrysler after his initial opposition to a private equity sale, reported in The New York Times.

http://www.businessweek.com/magazine/content/07_22/c403...

Lawmakers last week questioned Chrysler Chief Executive Robert Nardelli on Cerberus's commitment to the company. In one exchange with Mr. Nardelli, Sen. Robert Corker (R., Tenn.) criticized the firm. "Cerberus has cash, lots of cash, that it is unwilling to put into this company," Sen. Corker said.

The pressure from Washington lawmakers has put Cerberus in an uncomfortable spotlight. The New York firm, started in 1992, earned its stripes as a distressed-bond investor but expanded into a buyer of entire companies. Once it struck deals to buy GMAC in 2006 and Chrysler a year later, the firm has raised its public profile ever so slightly by hiring former Treasury Secretary John Snow and former Vice President Dan Quayle.

. . . .
Though it controls Chrysler, the firm has limited financial exposure to the auto maker. When Cerberus led a $7.4 billion investment for an 80.1% stake in the auto maker in 2007, it sold off at least $6 billion of that to co-investors, from Citigroup Inc. to hedge fund Third Point LLC to private-equity shop Sun Capital Partners Inc. This past July, Cerberus and its co-investors also lent $2 billion to Chrysler.

. . . .

http://online.wsj.com/article/SB122887590029593727.html?mod=googlenews_wsj

Granted, Cerberus is apparently limited by agreements with its investors as to how much it can put into the auto companies.
As for Cerberus's management. The chairman at this time is John Snow

http://www.hoovers.com/cerberus-capital-management/--ID__112328--/free-co-factsheet.xhtml

But a former (apparently) chairman was Dan Quayle.

Dan Quayle joined the Cerberus Advisory Board in 2000, and currently serves as Chairman. Cerberus is one of the world's leading private investment firms, with over $16 billion in committed capital and offices in New York, Chicago, Los Angeles, Atlanta, London, Baarn,(The Netherlands), Frankfurt, Osaka,and Tokyo. As Chairman of Cerberus Global Investments, Dan Quayle has been actively involved in new business sourcing and marketing for Cerberus in North America, Asia and Europe. His extensive global network of public sector and private sector decision-makers, combined with his investment expertise, have significantly contributed to the growth of Cerberus. Dan Quayle has offices in New York and Arizona; He regularly travels throughout the US, Europe and Asia to meet with the heads of investment banks, corporations, buyout shops, potential investors, and other business leaders. His responsibilities include (1) ensuring that Cerberus stays at the forefront of deal flow activity, (2) facilitating Cerberus' entry into new markets and industries, and (3) fostering potential transaction partnerships.

http://www.vicepresidentdanquayle.com/biography.html

And Cerberus is sending Quayle to lobby in Congress:

Cerberus, the private company behind Chrysler, is investing $2 million in lobbying efforts to send big name players, like former VP Dan Quayle, to Congress.

With a temporary bailout deal just over the horizon for the Big Three, one of the companies is not like the others. In 2007, Cerberus Capital Management, a private equity investment firm specializing in rejuvenating dying companies, acquired Chrysler and its financing arm. The idea was to flip the company for big money, but turning around the company—with its product line full of big trucks and SUVs—was harder than expected.

Chrysler continues to lose money and cut jobs. Meanwhile, Cerberus refuses to inject its own capital into the failing automaker. Instead, the company is investing $2 million in lobbying efforts and sending every big name it can to Congress to pull strings for a bailout. The top two lobbyists are Dan Quayle and John Snow.

http://www.hybridcars.com/incentives-laws/high-power-lo...

So, Danny Boy, let's see ya work ya magic on Shelby, et al. Otherwise there may be a strike and that would not be nice for Cerberus.

Clearly, it isn't just UAW workers who have a stake in the bail-out. A few stalwart, conservative GOPers do too.

GMAC does a lot of things besides make auto loans. It took me a while to accept the fact that a government bail-out or loan to GM is necessary, but not making the loan/bail-out could hurt a lot of people in addition to UAW workers.

Don't worry. The bail-out/loan will go through. It's all just posturing. The price for failure on this bail-out/loan is just too great. But, once it goes through, all involved will be under tremendous pressure to work miracles. It may not be possible but a lot rides on the success of this. I have some experience in negotiating in difficult situations. I would say that the bail-out/loan will go through. It's a matter of whether the UAW holds its own and does not flinch. No less than John Snow and Dan Quayle want this bail-out/loan. That's some powerful folks, by golly.

[Veritas_et_Aequitas]

1. Hmmm... time to move my money out of there...

[madrchsod]

2. i just read your post to my 23 year old daughter who works for borg warner

she does`t understand why anyone would vote against loaning money to gm and chrysler...

if gm and chrysler go under there will be a depression in this country and around the world.

[Raschel]

3. I wish she was in congress. Seems like many are voting for the downfall of our country.

[madrchsod]

6. now i know how my grandparents felt

when they had to raise my mom and dad during the depression...

i`m 62 years old and dammed tried of this shit.

[autorank]

4. k*r Thanks for this. Excellent n/t

[Doremus]

5. Very interesting. Thanks for the background. n/t