Re: CNH/Fiat?

Posted by George 2 on January 24, 2005 at 17:47:35 from (216.46.141.114):

In Reply to: CNH/Fiat? posted by PAULIH300 on January 24, 2005 at 16:08:07:

Guys, lets not panic. Yes Fiat automobile manufacturing is losing money, but the Fiat trucks, construction equipment and Case New Holland is making good money. The Fiat company is trying to divest it's money losing automobile business onto General Motors via the PUT option they have with GM. It appears that Fiat management don't see the automobile business as having any long term profit potential and as such they are trying to enforce the effective sale to GM. What is worrisome is that if GM get's out of it unscathed, what is Fiat going to do with the automobile business to make it profitable. Whatever method is pursued, one thing is sure and that is a huge writedown on the automobile assets will occur. As for AGCO, there is no way they could get hold of CNH due to the restrictive anti trust laws that exist in the United States and the European Union. The most likely scenario is a huge writedown of the automobile asset and one of the Asian automobile companies buying up the asset for a song, shutting down the factories and then building the same cars in Asia for about half the cost with non unionized labor. The Fiat automobile workers then lose their jobs and the Fiat investors lose their shirts on share value.

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