Autoblog

GM, Chrysler holding merger talks again? Or not...

Frank Filipponio — Thu, 18 Dec 2008 10:58:00 EST

Filed under: Hirings/Firings/Layoffs, Plants/Manufacturing, Chrysler, GM, Earnings/Financials, UAW/Unions, Canada

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]

GM, Chrysler holding merger talks again? Or not... originally appeared on Autoblog on Thu, 18 Dec 2008 10:58:00 EST. Please see our terms for use of feeds.

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U.S. Treasury ends talks with GM/Chrysler for merger funds

Chris Shunk — Fri, 31 Oct 2008 12:37:00 EST

Filed under: Government/Legal, Chrysler, Ford, GM

Any merger talks between Chrysler and General Motors appear to be on hold after the U.S. Treasury has talks with the struggling automakers over their request for a loan. The two automakers were reportedly asking for as much as $10 billion to support a merger, but some say the Treasury was unwilling to give money away for a deal that could potentially result in thousands of lost jobs. The Treasury says automaker financial arms like GMAC and Ford Credit are still eligible for assistance with troubled assets, which could number in the billions of dollars. The Bush administration is said to be working to speed up the $25 billion in loan guarantees that the industry was appropriated to retool factories. Massive government loans can sometimes take 6-18 months to take affect, but the way automakers are burning through cash, GM may need the cash as soon as possible.

There is no doubt these are very troubled times for the U.S. auto industry, and it seems everything is happening very quickly right now. Most forecasts are pointing to a similarly dismal 2009, too, so this mess is far from over.

[Source: Automotive News, sub. req'd]

U.S. Treasury ends talks with GM/Chrysler for merger funds originally appeared on Autoblog on Fri, 31 Oct 2008 12:37:00 EST. Please see our terms for use of feeds.

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GM wants $10 billion in aid from the Feds to buy Chrysler

Jonathon Ramsey — Tue, 28 Oct 2008 16:01:00 EST

Filed under: Government/Legal, Chrysler, GM, Earnings/Financials

In the latest development of The Incomprehensible Union, General Motors is reportedly asking the U.S. government for $10 billion -- on top of the $25 billion loan approved recently -- to help it merge with Chrysler. The supplemental infusion would give the government, i.e. you and me, a stake in the merged company in the form of preferred stock, would see the government taking over pension obligations and provide a credit line for operations.

The government is weighing the request since it's likely that no federal official wants to be on the watch that saw the instantaneous vaporizing of two American icons and hundreds of thousands of jobs. The government has asked that as many jobs as possible be spared, and GM said "Sure!" Yet for a merger where cost savings and redundancy elimination have been the headlines, we don't know why anyone believes GM-Chrysler wouldn't jettison a whole bunch of the 11 brands, 10,000 dealers, and 100,000 union jobs. And that's just for starters.

Which is one of the (many) reasons we still don't understand the GM-Chrysler union. The additional $10 billion we can swallow -- after all, the government spends much more than that on projects that could be considered far more dubious than trying to save an astronomical number of jobs and businesses. And we know what Cerberus gets from the deal. We'd like to find out what the GM guys see that makes this merger attractive... other than the fact that Chrysler has $11 billion in cash.

[Source: Reuters]

GM wants $10 billion in aid from the Feds to buy Chrysler originally appeared on Autoblog on Tue, 28 Oct 2008 16:01:00 EST. Please see our terms for use of feeds.

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Battle Royale: If GM and Chrysler merge, which models survive?

John Neff — Mon, 27 Oct 2008 19:55:00 EST

Filed under: Chrysler, GM

Click above for the Battle Royale between GM and Chrysler models

At first we thought the idea of a merger between General Motors and Chrysler LLC was laughable. We still do, but persistent reports to the contrary have us fearing that this marriage just might happen. Combining these two automakers would be a messy job, as many models on both sides of the fence compete directly with on another in the marketplace. If the merger does happen, someone may have to sit down and decide which models stay and which go. We decided to play arm chair auto executive quarterback and hold a Battle Royale. We've pitted model against model in 12 segments in which GM and Chrysler compete directly. In this thought experiment, only one model in each segment will survive to see the New World Order. Get to clickin' below to find out which ones make it.

Click here for Match 1: Chevy Cobalt vs. Dodge Caliber

Gallery: Battle Royale: GM vs. Chrysler

Battle Royale: If GM and Chrysler merge, which models survive? originally appeared on Autoblog on Mon, 27 Oct 2008 19:55:00 EST. Please see our terms for use of feeds.

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GM wants Chrysler deal done soon, might not be able to get the cash

Jeremy Korzeniewski — Tue, 21 Oct 2008 08:01:00 EST

Filed under: Government/Legal, Hirings/Firings/Layoffs, Chrysler, GM, Earnings/Financials, UAW/Unions

General Motors and Cerberus reportedly want to act as quickly as possible if they are going to make a move on Chrysler. It seems that the two bargainers would like to come to a decision before the upcoming Presidential elections, as they believe they may get more promises from either candidate before the actual vote takes place. A potential problem exists though, as General Motors is finding it tough to come up with the cash needed to make a deal happen and banks aren't about the lend it to them. An alternative option that's being considered is getting government backing for the deal.

Though it sounded hard to believe when we first heard the GM/Chrysler merger rumors, it truly appears that these talks are taking place at a very high level and the deal could indeed be on its way to. We'll just need to pay close attention in the next few weeks to the reactions from the Feds, the UAW and the thousands of workers that would inevitably be affected by the deal. Stay tuned.

[Sources: The Detroit News, Market Watch, Automotive News - sub. req'd]

GM wants Chrysler deal done soon, might not be able to get the cash originally appeared on Autoblog on Tue, 21 Oct 2008 08:01:00 EST. Please see our terms for use of feeds.

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Lutz: One of Big 3 will die, but not us

Frank Filipponio — Thu, 08 Mar 2007 13:56:00 EST

Filed under: Chrysler, Ford, GM, Earnings/Financials

While deftly avoiding the General Motors buyout of Chrysler issue, GM Vice Chairman Bob Lutz did say that he can see one of Detroit's Big 3 dying off in the not-too-distant future. Citing increased market pressures and too much capacity, he said in Geneva that present trends lead to only one conclusion, that one of the domestic automakers will be squeezed out. It won't be GM, however. "Right now, we're in the best position," he said. "We're approaching the end of the beginning of the transformation of GM."

We agree that GM is closest to being on the right track, so it remains to be seen whether Ford can survive its own turnaround, or if Chrysler will weather the current storms and right the ship before somebody comes in and dismantles it.

Lutz went on to detail the legacy costs that are behind most of the pessimism about the domestic industry. It's stuff we've heard before like pensions and health care for employees (and retirees) that are a $2,000-per-vehicle "burden" on the manufacturers. The biggest question on everybody's mind, however, wasn't directly addressed. Rather than talking about a GM/Chrysler deal, Lutz discussed the breakdown in the Renault-Nissan talks. "Generically, synergies are easier to get in the same geography than across geographies," he said. "That was the problem with Renault-Nissan. What sane auto company would sign up for that?" What company indeed?

[Source: Detroit News]

Lutz: One of Big 3 will die, but not us originally appeared on Autoblog on Thu, 08 Mar 2007 13:56:00 EST. Please see our terms for use of feeds.

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