I'm sitting at a salon waiting on my wife to get done (still there actually) and I am reading the news on my blackberry. I saw this artical on the news app. Sory there isn't a link, but this is the first few paragraphs.
"Reports: Chrysler, GM discuss merger, acquisition
Oct 11, 2008 9:05 AM EST
DETROIT - General Motors Corp. and Chrysler LLC have held preliminary talks about a merger or an acquisition of Chrysler by GM, according to published reports.
The Wall Street Journal, citing people it described as familiar with the discussions, reported that Cerberus Capital Management, the private equity firm that owns 80.1 percent of Chrysler and 51 percent of GMAC Financial Services, proposed trading Chrysler's automotive operations to GM. The Journal said Cerberus would receive GM's remaining 49 percent stake in GMAC.
The New York Times, also citing people familiar with the talks, reported that the automakers were discussing a merger. The Times did not mention GMAC.
GMAC, primarily an auto lender, also has significant mortgage lending operations that have been hit hard by the crisis in that industry.
The talks have stalled because of the recent turmoil in the financial markets, according to the Journal. Its sources said negotiations could resume if markets stabilize because both GM and Cerberus want to quickly divest the assets under discussion.
The negotiations between 100-year-old GM and 83-year-old Chrysler began more than a month ago, according to the Times. Its sources said the chances of a merger were "50-50" as of Friday and likely would take weeks to complete.
Both newspapers posted their stories on their Web sites late Friday."
I'm sitting at a salon waiting on my wife to get done (still there actually) and I am reading the news on my blackberry. I saw this artical on the news app. Sory there isn't a link, but this is the first few paragraphs.
"Reports: Chrysler, GM discuss merger, acquisition
Oct 11, 2008 9:05 AM EST
DETROIT - General Motors Corp. and Chrysler LLC have held preliminary talks about a merger or an acquisition of Chrysler by GM, according to published reports.
The Wall Street Journal, citing people it described as familiar with the discussions, reported that Cerberus Capital Management, the private equity firm that owns 80.1 percent of Chrysler and 51 percent of GMAC Financial Services, proposed trading Chrysler's automotive operations to GM. The Journal said Cerberus would receive GM's remaining 49 percent stake in GMAC.
The New York Times, also citing people familiar with the talks, reported that the automakers were discussing a merger. The Times did not mention GMAC.
GMAC, primarily an auto lender, also has significant mortgage lending operations that have been hit hard by the crisis in that industry.
The talks have stalled because of the recent turmoil in the financial markets, according to the Journal. Its sources said negotiations could resume if markets stabilize because both GM and Cerberus want to quickly divest the assets under discussion.
The negotiations between 100-year-old GM and 83-year-old Chrysler began more than a month ago, according to the Times. Its sources said the chances of a merger were "50-50" as of Friday and likely would take weeks to complete.
Both newspapers posted their stories on their Web sites late Friday."
as a Chrysler dealership employee, we have known this for MORE than just a month ago. this has been going on for AT LEAST since January, shortly after Cerberus bought Chrysler from Daimler.
it's hardly a 'done deal' and like the article states, chances of a merger is only "50-50".
What would this really accomplish when both automakers are sinking fast? They both have the same issues with not enough product Americans want, labor issues, and legacy pension costs that are drowning them both. I also don't see lifelong brand loyalists going for the idea either.
I'm also confuzzled. I thought reports were swirling about GM being close to bankruptcy and unable to borrow any more money? If that's the case, how could they buy another company?
Two struggling companies can choose to merge in a 50/50 type merger if they are both well-established companies with decades of experience. Imagine if GM were to just go away - that'd be the death of an American icon, and the American market would prefer to see them merge and play nice with a competitor.
The trouble is, neither GM nor Chrysler have shown much effort to produce gas-sippers. The companies that produce efficient cars - gas, hybrid, or electric - will do the best for the next 20 years. If either wants to survive, they'll need to 'get with the times.' The Volt is an admirable project, and I hope it does well. Surely there are 200,000 people out there willing to buy a $50k PHEV. It's not likely to sell 2 million units at that price, but the 2015 model just might... IF they introduce it slowly like the Smart is introduced into the USA.
I think its a bit like the XM/ Sirius "merger" but XM will still be XM and there will no longer be a Sirius. To me, thats a buy out, but thats beside the point. Both companies are in debt into their ears and will not survive alone. Together, they think they can work better.
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R2-D2 42
If that's the case, how could they buy another company?
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