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Channel: News & Politics
Uploaded: December 31, 1969 at 6:59 pm
Author: AntiConformist911
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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."Without referencing this specific rumor, as we've often said, GM officials routinely discuss issues of mutual interest with other automakers," GM spokesman Tony Cervone said."The company is looking at a number of potential global partnerships as it explores growth opportunities around the world," Chrysler spokeswoman Lori McTavish said. "Beyond those partnerships already announced, however, Chrysler has not formed any new agreements and has no further announcements to make at this time."A tie-up between the automotive giants would be historic for the industry and solidify GM's position as the global sales leader, which it has been in danger of losing to Toyota Motor Corp. GM and Toyota finished 2007 essentially even in vehicles sold worldwide.This would not be the first time Detroit's automakers have explored mergers.GM reportedly talked with DaimlerChrysler AG in 2007 about acquiring Chrysler before Cerberus made a deal to acquire most of the automaker.In 2005, GM and Ford Motor Co. reportedly held talks regarding a potential business combination.Cerberus acquired its GMAC stake in 2006 for $14 billion and bought 80.1 percent of Chrysler from Daimler AG in August 2007 in a $7.4 billion deal. Cerberus and Daimler confirmed last month they are in talks for Cerberus to acquire Daimler's remaining Chrysler stake.The auto industry has been hit hard in recent weeks by the effects of the credit crisis, prompting GM and Ford to issue statements Friday to dispel the notion that they might be headed for bankruptcy.GM and Ford shares were battered with the rest of the stock market this week, falling to lows not seen in decades. GM shares lost about half of their already-depressed value during the week, closing at $4.89 on Friday. Ford shares fell similarly, ending the week at $1.99. http://www.huffingtonpost.com/...