Can this really be happening all over again? Weeks after merger talks between Chrysler and GM seemed to implode, the companies may be talking about hooking up again, according to the Wall Street Journal. General Motors Corp. and Chrysler LLC have reportedly stepped back into the negotiation room after Chrysler owner Cerberus Capital Management LP said that maybe, just maybe, it's willing to give up some ownership in the Pentastar. In fact, it may be that Cerberus has started this latest round of talks to show Washington it's willing to play nice with the other kids to secure part of a $14 billion rescue package that's on the table.

Nevertheless, GM spokesman Tony Cervone woke up this morning and immediately denied that merger talks between the two weakest Detroit automakers have resumed, saying only that GM's stance on the merger is the same as it was in November.

We talked about this the last time a merger was mentioned, but consolidating these two automakers would most likely lead to massive layoffs and more than a few plant shutdowns, plus the elimination of a lot of Chrysler models. There is too much capacity and overlap between the two companies' product lineups, but with money running low for both of them, merging could still be made a condition of receiving federal assistance.

[Source: Wall Street Journal via The Globe and Mail, Marketwatch]

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