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Week in Review

Here are several follow up articles about our recent discussions

Turns out GM is considering Chrysler. GM wants it for free and it would add $62 B a year in sales, can GM merger its way out of trouble?  Sounds like Burroughs and Sperry making Unisys to me…Think about what we have studied concerning quality and different cultures in class, does this one make sense?

Airbus is using an old idea to solve its difficulties, fire the help. 10,000 of them.  French Unions call it an Act of War.

Good article in the Sunday DMN about TXU, did you know the Dallas and Houston mayors were behind the effort to fight coal powered plants?  Will KKR buy and dump leaving us to pay off the debt?

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2 responses to “Week in Review”

  1. Guadalupe Barraza Avatar
    Guadalupe Barraza

    I have not had time to comment much on the TXU deal but I have been collecting articles and highlighting interesting points since the deal was announced. What I find interesting is the enormous amount of debt that would have to be incurred in order to pay off the deal. I wonder how long would consumer savings last. Wouldn’t rates have to increase in order to pay off the debt? If rates don’t increase then parts of the company would have to be sold off or outsourced in order to cut cost. The other option would be incurring yet more debt in order to pay off what the previous two would not cover. It seems like this would be a never ending cycle of debt. Oh, and then there is always the possibility of hiding behind bankruptcy protection. Sounds like a junk deal to me. I expect to hear a lot more on this deal as the weeks progress. I just hope that we’ve all learned something from such scandals as Enron and Amarath.

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  2. Dennis Elam Avatar
    Dennis Elam

    As I said in class and on the blog, takeovers all happen at market tops. It is fitting that a new high in the Dow Industrials be accompanied by the most optimistic takeover with the most debt, all of which is based on permanently high energy prices. You are quite correct, who is going to pay all this debt off?

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