GM-Chrysler Merger News and Discussion
#1
GM-Chrysler Merger News and Discussion
It's breaking news on CNBC right now. They're saying as of today, the merge between GM and Chrysler is a 50/50 chance. It seems Cerberus is still in talks with Nissan and Renault.
http://www.nytimes.com/2008/10/11/bu...hp&oref=slogin
http://www.nytimes.com/2008/10/11/bu...hp&oref=slogin
G.M. and Chrysler Explore Merger
DETROIT — General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.
The talks between G.M. and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were “50-50” as of Friday and would most likely still take weeks to work out.
A merger would be a historic event, with two of the most iconic names in American industry coming together to survive in an increasingly difficult environment. Both have roots dating back decades in Detroit and, with Ford, long dominated the auto industry — until Japanese and other foreign car makers began making inroads into the American market.
The auto industry is being pummeled from all sides — by high gas prices that have soured consumers on profitable S.U.V.’s, by a softening economy that has scared shoppers away from showrooms, and by tight credit that is making it difficult for willing buyers to obtain loans. Both G.M. and Chrysler have been struggling with product lineups that are out of sync with consumer demand for smaller, more fuel-efficient cars.
General Motors’ stock has fallen from more than $42 a share last year to less than $5, and it is burning through its cash hoard at a rapid rate. Chrysler, as a private company, no longer needs to report its finances.
The meetings between General Motors and Cerberus began more than a month ago, said people familiar with the discussions, and the companies have held several talks involving their most senior executives. Given that both G.M. and Chrysler are struggling, the two sides may determine a merger may not be in their best interests.
The exploratory talks have included debates over various calculations of the savings that would result from a merger, these people said, but neither side has yet to dig into each others’ private financial books and records.
At the same time, Cerberus is continuing to hold talks with other automakers including Nissan and Renault, said people familiar with the discussions. It is unclear at what stage those discussions have reached.
Speculation about a possible bankruptcy filing by G.M. has mounted in recent weeks because of the automaker’s dwindling cash reserves. The automaker had $21 billion in cash on hand at the end of the second quarter, but it was burning through more than $1 billion a month.
The credit rating firm Standard & Poor’s put G.M. on negative credit watch on Thursday.
But G.M. has said it is confident that it can increase its liquidity, and emphasized in a statement released Thursday that it was not considering a bankruptcy filing.
G.M. once commanded about 50 percent of market, but its share so far this year has fallen to 22 percent, according to the research firm Autodata. Chrysler had a market share of about 15 percent before acquisition in 1998 by Daimler, but its share this year has dwindled to 11 percent.
How government and labor react to a potential merger of G.M. and Chrysler is unclear. There could be antitrust questions raised, but political issues could be overshadowed by the precarious financial prospects of both automakers.
If G.M., the nation’s largest automaker, combined operations with Chrysler, the smallest of Detroit’s Big Three, they would create an auto giant that would surpass Japan’s Toyota Motor Company, which recently has been battling G.M. for bragging rights as the world’s largest automaker.
A G.M. spokesman declined to comment on any specific talks with Chrysler. “Without referencing this specific rumor, as we’ve often said G.M. officials routinely discuss issues of mutual interest with other automakers,” said the spokesman, Tony Cervone. There was no immediate comment from Cerberus.
People briefed on the deal said the talks started as an exploration of possible joint venture opportunities between G.M. and Chrysler.
Cerberus acquired an 80.1 percent stake in Chrysler in August 2007 for $7.4 billion from the German automaker Daimler AG.
Under the terms of the deal being discussed, Cerberus would end up owning an unspecified equity stake in G.M.-Chrysler, according to people briefed on the talks.
The ramifications of the merger would be enormous in the global auto industry. G.M. and Chrysler together would control more than 35 percent of the United States vehicle market, and be by far the dominant producer of pickup trucks, sport utility vehicles and minivans.
It would also marry such iconic American brands as G.M.’s Chevrolet and Cadillac with Chrysler’s Jeep and Dodge divisions.
However, the potential merger carries enormous risks. Both G.M. and Chrysler are struggling mightily in what is the worst market for vehicle sales in the United States in 15 years.
People close to the discussions said that if the prospective deal did not happen, Cerberus would probably look to Nissan and Renault.
But the marriage of G.M. and Chrysler has far more potential than hitching Chrysler to a foreign automaker. While G.M. and Chrysler may be hamstrung by labor contracts from cutting jobs, the two companies could combine dealers, product lines and advanced vehicle technology.
Bill Vlasic reported from Detroit and Andrew Ross Sorkin from New York.
DETROIT — General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.
The talks between G.M. and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were “50-50” as of Friday and would most likely still take weeks to work out.
A merger would be a historic event, with two of the most iconic names in American industry coming together to survive in an increasingly difficult environment. Both have roots dating back decades in Detroit and, with Ford, long dominated the auto industry — until Japanese and other foreign car makers began making inroads into the American market.
The auto industry is being pummeled from all sides — by high gas prices that have soured consumers on profitable S.U.V.’s, by a softening economy that has scared shoppers away from showrooms, and by tight credit that is making it difficult for willing buyers to obtain loans. Both G.M. and Chrysler have been struggling with product lineups that are out of sync with consumer demand for smaller, more fuel-efficient cars.
General Motors’ stock has fallen from more than $42 a share last year to less than $5, and it is burning through its cash hoard at a rapid rate. Chrysler, as a private company, no longer needs to report its finances.
The meetings between General Motors and Cerberus began more than a month ago, said people familiar with the discussions, and the companies have held several talks involving their most senior executives. Given that both G.M. and Chrysler are struggling, the two sides may determine a merger may not be in their best interests.
The exploratory talks have included debates over various calculations of the savings that would result from a merger, these people said, but neither side has yet to dig into each others’ private financial books and records.
At the same time, Cerberus is continuing to hold talks with other automakers including Nissan and Renault, said people familiar with the discussions. It is unclear at what stage those discussions have reached.
Speculation about a possible bankruptcy filing by G.M. has mounted in recent weeks because of the automaker’s dwindling cash reserves. The automaker had $21 billion in cash on hand at the end of the second quarter, but it was burning through more than $1 billion a month.
The credit rating firm Standard & Poor’s put G.M. on negative credit watch on Thursday.
But G.M. has said it is confident that it can increase its liquidity, and emphasized in a statement released Thursday that it was not considering a bankruptcy filing.
G.M. once commanded about 50 percent of market, but its share so far this year has fallen to 22 percent, according to the research firm Autodata. Chrysler had a market share of about 15 percent before acquisition in 1998 by Daimler, but its share this year has dwindled to 11 percent.
How government and labor react to a potential merger of G.M. and Chrysler is unclear. There could be antitrust questions raised, but political issues could be overshadowed by the precarious financial prospects of both automakers.
If G.M., the nation’s largest automaker, combined operations with Chrysler, the smallest of Detroit’s Big Three, they would create an auto giant that would surpass Japan’s Toyota Motor Company, which recently has been battling G.M. for bragging rights as the world’s largest automaker.
A G.M. spokesman declined to comment on any specific talks with Chrysler. “Without referencing this specific rumor, as we’ve often said G.M. officials routinely discuss issues of mutual interest with other automakers,” said the spokesman, Tony Cervone. There was no immediate comment from Cerberus.
People briefed on the deal said the talks started as an exploration of possible joint venture opportunities between G.M. and Chrysler.
Cerberus acquired an 80.1 percent stake in Chrysler in August 2007 for $7.4 billion from the German automaker Daimler AG.
Under the terms of the deal being discussed, Cerberus would end up owning an unspecified equity stake in G.M.-Chrysler, according to people briefed on the talks.
The ramifications of the merger would be enormous in the global auto industry. G.M. and Chrysler together would control more than 35 percent of the United States vehicle market, and be by far the dominant producer of pickup trucks, sport utility vehicles and minivans.
It would also marry such iconic American brands as G.M.’s Chevrolet and Cadillac with Chrysler’s Jeep and Dodge divisions.
However, the potential merger carries enormous risks. Both G.M. and Chrysler are struggling mightily in what is the worst market for vehicle sales in the United States in 15 years.
People close to the discussions said that if the prospective deal did not happen, Cerberus would probably look to Nissan and Renault.
But the marriage of G.M. and Chrysler has far more potential than hitching Chrysler to a foreign automaker. While G.M. and Chrysler may be hamstrung by labor contracts from cutting jobs, the two companies could combine dealers, product lines and advanced vehicle technology.
Bill Vlasic reported from Detroit and Andrew Ross Sorkin from New York.
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Looks like GM and Chrysler will merge!!!!
http://www.nytimes.com/2008/10/11/bu...hp&oref=slogin
G.M. and Chrysler Explore Merger
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By BILL VLASIC and ANDREW ROSS SORKIN
Published: October 10, 2008
DETROIT — General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.
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General Motors Corp
Go to your Portfolio »
The talks between G.M. and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were “50-50” as of Friday and would most likely still take weeks to work out.
A merger would be a historic event, with two of the most iconic names in American industry coming together to survive in an increasingly difficult environment. Both have roots dating back decades in Detroit and, with Ford, long dominated the auto industry — until Japanese and other foreign car makers began making inroads into the American market.
The auto industry is being pummeled from all sides — by high gas prices that have soured consumers on profitable S.U.V.’s, by a softening economy that has scared shoppers away from showrooms, and by tight credit that is making it difficult for willing buyers to obtain loans. Both G.M. and Chrysler have been struggling with product lineups that are out of sync with consumer demand for smaller, more fuel-efficient cars.
General Motors’ stock has fallen from more than $43 a share last year to less than $5, and it is burning through its cash hoard at a rapid rate. Chrysler, as a private company, no longer needs to report its finances.
The meetings between General Motors and Cerberus began more than a month ago, said people familiar with the discussions, and the companies have held several talks involving their most senior executives. Given that both G.M. and Chrysler are struggling, the two sides may determine a merger may not be in their best interests.
The exploratory talks have included debates over various calculations of the savings that would result from a merger, these people said, but neither side has yet to dig into each others’ private financial books and records.
At the same time, Cerberus is continuing to hold talks with other automakers including Nissan and Renault, said people familiar with the discussions. It is unclear at what stage those discussions have reached.
Speculation about a possible bankruptcy filing by G.M. has mounted in recent weeks because of the automaker’s dwindling cash reserves. The automaker had $21 billion in cash on hand at the end of the second quarter, but it was burning through more than $1 billion a month.
The credit rating firm Standard & Poor’s put G.M. on negative credit watch on Thursday.
But G.M. has said it is confident that it can increase its liquidity, and emphasized in a statement released Thursday that it was not considering a bankruptcy filing.
G.M. once commanded about 50 percent of the American vehicle market, but its share so far this year has fallen to 22 percent, according to the research firm Autodata. Chrysler had a market share of about 15 percent before its acquisition in 1998 by Daimler, but its share this year has dwindled to 11 percent.
How government and labor might react to a potential merger of G.M. and Chrysler is unclear. Antitrust questions could be raised, but political issues could be overshadowed by the precarious financial prospects of both automakers.
If G.M., the nation’s largest automaker, combined operations with Chrysler, the smallest of Detroit’s Big Three, they would create an auto giant that would surpass Japan’s Toyota Motor Company, which recently has been battling G.M. for bragging rights as the world’s largest automaker.
A G.M. spokesman declined to comment on any specific talks with Chrysler. “Without referencing this specific rumor, as we’ve often said G.M. officials routinely discuss issues of mutual interest with other automakers,” said the spokesman, Tony Cervone.
There was no immediate comment from Cerberus.
People briefed on the deal said the talks started as an exploration of possible joint venture opportunities between G.M. and Chrysler.
Cerberus acquired an 80.1 percent stake in Chrysler in August 2007 for $7.4 billion from the German automaker Daimler AG.
Under the terms of the deal being discussed, Cerberus would end up owning an unspecified equity stake in G.M.-Chrysler, people briefed on the talks said.
The ramifications of the merger would be enormous in the global auto industry. G.M. and Chrysler together would control more than 35 percent of the United States vehicle market, and be by far the dominant producer of pickup trucks, sport utility vehicles and minivans.
It would also marry such iconic American brands as G.M.’s Chevrolet and Cadillac with Chrysler’s Jeep and Dodge divisions.
However, the potential merger carries enormous risks. Both G.M. and Chrysler are struggling mightily in what is the worst market for vehicle sales in the United States in 15 years.
People close to the discussions said that if the prospective deal did not happen, Cerberus would probably look to Nissan and Renault.
But the marriage of G.M. and Chrysler has far more potential than hitching Chrysler to a foreign automaker. While G.M. and Chrysler may be hamstrung by labor contracts from cutting jobs, the two companies could combine dealers, product lines and advanced vehicle technology.
Sign In to E-Mail or Save This
Reprints
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Permalink
By BILL VLASIC and ANDREW ROSS SORKIN
Published: October 10, 2008
DETROIT — General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.
Skip to next paragraph Add to Portfolio
General Motors Corp
Go to your Portfolio »
The talks between G.M. and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were “50-50” as of Friday and would most likely still take weeks to work out.
A merger would be a historic event, with two of the most iconic names in American industry coming together to survive in an increasingly difficult environment. Both have roots dating back decades in Detroit and, with Ford, long dominated the auto industry — until Japanese and other foreign car makers began making inroads into the American market.
The auto industry is being pummeled from all sides — by high gas prices that have soured consumers on profitable S.U.V.’s, by a softening economy that has scared shoppers away from showrooms, and by tight credit that is making it difficult for willing buyers to obtain loans. Both G.M. and Chrysler have been struggling with product lineups that are out of sync with consumer demand for smaller, more fuel-efficient cars.
General Motors’ stock has fallen from more than $43 a share last year to less than $5, and it is burning through its cash hoard at a rapid rate. Chrysler, as a private company, no longer needs to report its finances.
The meetings between General Motors and Cerberus began more than a month ago, said people familiar with the discussions, and the companies have held several talks involving their most senior executives. Given that both G.M. and Chrysler are struggling, the two sides may determine a merger may not be in their best interests.
The exploratory talks have included debates over various calculations of the savings that would result from a merger, these people said, but neither side has yet to dig into each others’ private financial books and records.
At the same time, Cerberus is continuing to hold talks with other automakers including Nissan and Renault, said people familiar with the discussions. It is unclear at what stage those discussions have reached.
Speculation about a possible bankruptcy filing by G.M. has mounted in recent weeks because of the automaker’s dwindling cash reserves. The automaker had $21 billion in cash on hand at the end of the second quarter, but it was burning through more than $1 billion a month.
The credit rating firm Standard & Poor’s put G.M. on negative credit watch on Thursday.
But G.M. has said it is confident that it can increase its liquidity, and emphasized in a statement released Thursday that it was not considering a bankruptcy filing.
G.M. once commanded about 50 percent of the American vehicle market, but its share so far this year has fallen to 22 percent, according to the research firm Autodata. Chrysler had a market share of about 15 percent before its acquisition in 1998 by Daimler, but its share this year has dwindled to 11 percent.
How government and labor might react to a potential merger of G.M. and Chrysler is unclear. Antitrust questions could be raised, but political issues could be overshadowed by the precarious financial prospects of both automakers.
If G.M., the nation’s largest automaker, combined operations with Chrysler, the smallest of Detroit’s Big Three, they would create an auto giant that would surpass Japan’s Toyota Motor Company, which recently has been battling G.M. for bragging rights as the world’s largest automaker.
A G.M. spokesman declined to comment on any specific talks with Chrysler. “Without referencing this specific rumor, as we’ve often said G.M. officials routinely discuss issues of mutual interest with other automakers,” said the spokesman, Tony Cervone.
There was no immediate comment from Cerberus.
People briefed on the deal said the talks started as an exploration of possible joint venture opportunities between G.M. and Chrysler.
Cerberus acquired an 80.1 percent stake in Chrysler in August 2007 for $7.4 billion from the German automaker Daimler AG.
Under the terms of the deal being discussed, Cerberus would end up owning an unspecified equity stake in G.M.-Chrysler, people briefed on the talks said.
The ramifications of the merger would be enormous in the global auto industry. G.M. and Chrysler together would control more than 35 percent of the United States vehicle market, and be by far the dominant producer of pickup trucks, sport utility vehicles and minivans.
It would also marry such iconic American brands as G.M.’s Chevrolet and Cadillac with Chrysler’s Jeep and Dodge divisions.
However, the potential merger carries enormous risks. Both G.M. and Chrysler are struggling mightily in what is the worst market for vehicle sales in the United States in 15 years.
People close to the discussions said that if the prospective deal did not happen, Cerberus would probably look to Nissan and Renault.
But the marriage of G.M. and Chrysler has far more potential than hitching Chrysler to a foreign automaker. While G.M. and Chrysler may be hamstrung by labor contracts from cutting jobs, the two companies could combine dealers, product lines and advanced vehicle technology.
#7
Administrator
How could it not...seriously.
We have a forum specifically for Automotive News.
Can you think of a single even that would be more worthy
of being in the Automotive News forum than Chrysler & GM
potentially merging?
...besides, it's a repost.
https://ls1tech.com/forums/showthread.php?t=1000133
We have a forum specifically for Automotive News.
Can you think of a single even that would be more worthy
of being in the Automotive News forum than Chrysler & GM
potentially merging?
...besides, it's a repost.
https://ls1tech.com/forums/showthread.php?t=1000133
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#8
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God, let's hope this isn't for real.
A merger would exacerbate the problems both companies have which are fundamentally the same. It wouldn't cure anything.
Cerberus is dying to unload Chrysler onto anyone and GM is basically broke. A marriage made in Hell.
A merger would exacerbate the problems both companies have which are fundamentally the same. It wouldn't cure anything.
Cerberus is dying to unload Chrysler onto anyone and GM is basically broke. A marriage made in Hell.
#10
#11
TECH Fanatic
Actually I think GM execs must be watching Charles Bronson's movies.
DEATHWISH comes to mind!!!!!!!!!!!!!!!!
#13
#14
This could get really weird. We all know how GM loves to recycle cars, so we could end up:
Chevy Camaro
Dodge Challenger
Pontiac Firebird
-All the same car
Chevy Corvette
Dodge Viper
-Same Car
Dodge Ram
Sierra
Silverado
-Same Truck
How weird would that be?
Chevy Camaro
Dodge Challenger
Pontiac Firebird
-All the same car
Chevy Corvette
Dodge Viper
-Same Car
Dodge Ram
Sierra
Silverado
-Same Truck
How weird would that be?
#15
TECH Fanatic
#16
Hmm.
Challenger SS?
Camaro SRT-8?
Silverado Ram Cummins Turbo Diesel?
Corvette SRT/10?
Though I'd rather see GM and Ford merge, this would be one seriously LARGE American car company no doubt.
Challenger SS?
Camaro SRT-8?
Silverado Ram Cummins Turbo Diesel?
Corvette SRT/10?
Though I'd rather see GM and Ford merge, this would be one seriously LARGE American car company no doubt.
#20