Thursday, May 24, 2007

$6 Billion for Something Called aQuantive and $1.3 Billion for Chrysler--What's Wrong With This Picture?

A lead story in Saturday's Wall Street Journal caught my eye: "Microsoft agreed to buy online-ad specialist aQuantive for $6 billion."

Then there was the big story on Friday: Private equity firm buys 80% of Chrysler for $1.3 billion. The private equity firm will also contribute $6 billion to Chrysler and the separated Chrysler will assume all of the estimated $19 billion in health and pension liabilities for employees and retirees represented by the United Auto Workers.

So, Daimler gets a net of only $1.3 billion for 80% of the American icon--mostly because of its unfunded liabilities.

I know the American auto industry also has trouble building vehicles people want to buy but you can't escape the impact the cost of health care in America has had on this legacy business.

What's wrong when a brand new company hardly anyone has every heard of and sells ads on the Ethernet (founded in 1997 with 2600 employees and $615 million in revenue) is worth four times more than Chrysler Corporation?

We need to get these health care costs under control.

How many good jobs can there be in the Ethernet?
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