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Old 10-11-2008, 10:26 AM   #1
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Chrysler, GM discuss merger, acquisition?

Fresh off the wire...

http://news.yahoo.com/s/ap/20081011/...r_merger_talks

and posted from the NY Times:
http://www.nytimes.com/2008/10/11/bu...html?th&emc=th

By TOM KRISHER, AP Business Writer
12 minutes ago

DETROIT - General Motors Corp., Chrysler LLC and Cerberus Capital Management LP have held preliminary talks about a merger or an acquisition of Chrysler by GM, according to a person familiar with the talks.

Chrysler, which is 80.1 percent owned by Cerberus, already has a joint venture with GM making a hybrid gas-electric powertrain, and has discussed a full merger or acquisition with GM, said the person, who did not want to be identified because the talks have not been made public.

The Wall Street Journal, citing people it described as familiar with the discussions, reported that Cerberus, a private equity firm that also owns 51 percent of GMAC Financial Services, proposed trading Chrysler's automotive operations to GM in exchange for 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.

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 have began more than a month ago. The Times said its sources pegged the chances of a merger being completed at "50-50."

"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 in an e-mail.

"The company is looking at a number of potential global partnerships as it explores growth opportunities around the world," Chrysler said in an e-mailed statement issued Friday night.

"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 talked with DaimlerChrysler AG in 2007 about acquiring Chrysler before Cerberus made a deal to acquire most of the automaker, but the talks fell through when GM decided it should concentrate on cost savings and efficiencies by globalizing its own operations.

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.


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Old 10-11-2008, 10:29 AM   #2
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i thought something like this might happen soon.
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Old 10-11-2008, 10:37 AM   #3
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well it makes more sense than going with a foreign manufacturer. That has not worked out for Chrysler so far... if they come together maybe they can figure out how to make something besides SUVs.
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Old 10-11-2008, 11:13 AM   #4
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they gonna come up with the " vipette " LOL JK
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Old 10-11-2008, 11:33 AM   #5
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Get ready for super amounts of flames and explosions from the people. Just as people have been yelling about the Porsche take over of VW group, although that seems like a plus to me. GM and Chrysler, whats the point, your taking to brand that are in a hole....they'll still be in at hole, just together. Chrysler is in even worse shape as IMO, most of their products are complete garbage. Probably less the 10% of their stuff I would buy. GM on the other hand although having alot of garbage too, has alot of great products and more are coming. They need to worry about themselves. The only way I would support a partnership is if the brands stayed out of each others R&D buisness. I don't want to start seeing chryslers with LS engines in them.
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Old 10-11-2008, 12:45 PM   #6
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i knew chrysler was going to be hurting with the current state of the gas prices, none of their models are very efficient. And they we're brought from the brink of bankrupcy back in the 80's. If GM does this, could mean they are that much closer to collapse, theyre in pretty bad shape currently....why would they want to take on more negitive equity?
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Old 10-11-2008, 01:06 PM   #7
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In 2005, GM and Ford Motor Co. reportedly held talks regarding a potential business combination.

This is the sentence that stood out to me. I wouldn't really care if Chrysler and GM merged at this point, Chrysler is a shadow of the company it used to be, it barely exists at this point. But GM and Ford?? Yech.

However this is the way it has been going and the way it will continue to go in the corporate world, I work in the appliance industry and "mergers" or takeovers are extremely common. For example, Whirlpool is the largest appliance manufacturer in the world by virtue of buying up nearly everyone else.
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Old 10-11-2008, 01:11 PM   #8
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Does Chrysler still own some of Mitsubishi? That would be weird GM working on cars like the lancer or gallant.

I can see it they phase out dodge and keep Chrysler as new Olds brand or phase out Chrysler keep dodge as a Saturn type brand.
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Old 10-11-2008, 01:19 PM   #9
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Quote:
Originally Posted by ch84 spi View Post
Does Chrysler still own some of Mitsubishi?
It took a long time, but I think they finally cast off the last remaining interest they held in Mitsubishi a couple years ago, although both companies to my knowledge are still building cars that share technology or components.

Wikipedia has a decent article detailing the history of Mitsubishi Motors: http://en.wikipedia.org/wiki/Mitsubishi_Motors
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Old 10-11-2008, 01:56 PM   #10
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Quote:
Originally Posted by DrkKnight614 View Post
Get ready for super amounts of flames and explosions from the people. Just as people have been yelling about the Porsche take over of VW group, although that seems like a plus to me. GM and Chrysler, whats the point, your taking to brand that are in a hole....they'll still be in at hole, just together. Chrysler is in even worse shape as IMO, most of their products are complete garbage. Probably less the 10% of their stuff I would buy. GM on the other hand although having alot of garbage too, has alot of great products and more are coming. They need to worry about themselves. The only way I would support a partnership is if the brands stayed out of each others R&D buisness. I don't want to start seeing chryslers with LS engines in them.
your right. chrysler makes crap and its way over priced and quality is in the dumpster. but i wouldnt mine having a ls9 300c
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