The Auto Solution

Let's stop the pussyfooting. Chrysler has to go. We have to take out capacity. The people who own Chrysler knew what they were getting into. They were the most sophisticated of investors: Cerberus. Every time CEO Bob Nardelli came on TV before now, he told us Chrysler was doing great. He says he is willing to sacrifice the upside and give it to the government. I say, terrific, but you know what? I offer Cerberus the upside and the downside, but no money. If we care about the workers, wipe out the investors, cancel their debt and sell it all to Ford (F - commentary - Cramer's Take), which seems to have a clue and is not desperate.

GM (GM - commentary - Cramer's Take)? OK, wholesale change. The company has to listen to Paul Ingrassia, who wrote a fabulous piece today in The Wall Street Journal that talked about a template, the joint factory between Toyota (TM - commentary - Cramer's Take) and GM, and the cost structure available there.

Put simply, the deal is clear: GM files bankruptcy, gets debtor-in-possession financing from the government, and restructures to make it so it costs no more than Toyota to make a car here. Anything less and the money has to be paid back with higher interest, or we get an even larger stake in the company than what we would get otherwise, as we obviously want some warrants or some options with that debtor-in-possession financing.

How about the argument that no one will buy their cars again? That's a warranty issue: We give them five years or 50,000 miles or whatever is comparable, and then people will buy away.

It's the only solution: Chrysler gets nothing; Ford gets nothing yet, because it doesn't want it; and GM files for bankruptcy. There. Done.

Random musings: Holy cow, Tony Crescenzi's article tells me it is time to refinance! What an amazing decline in rates.

At the time of publication, Cramer had no positions in the stocks mentioned.

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