GM and Chrysler talking about merger

[Plex]

Our heads are still reeling from one of the most tumultuous financial weeks on record, and the auto industry was far from immune. But despite our best efforts to drown our concerns in Racer5 IPA, the hits keep coming, and this time it's courtesy of the New York Times.

The Gray Lady is reporting that General Motors and Chrysler have been in talks about a possible merger for the past month, that "negotiations are not certain to produce a deal," "would most likely still take weeks to work out" and that two unnamed sources say that the chances of the merger going through are "50-50." Obfuscate much?

With GM's stock prices ending the week below $5 a share and Cerberus � the private equity firm that owns Chrysler � grasping at the flimsiest of straws, including continued talks with Nissan/Renault, a merger of unequals is two parts disturbing and one part intriguing.

Cerberus' people haven't been returning phone calls and the only comment offered to the NYT from the General's spokesperson, Tony Cervone, was, "Without referencing that specific rumor, as we've often said at GM officials routinely discuss issues of mutual interest with other automakers." Broad, unclear and exactly what we'd expect.

The merger of GM and Chrysler would put Cerberus in charge of an "unspecified equity stake" in the corporation, making the two-headed General-Chrysler (or Chrysler Motors?) the world's largest automaker, controlling over 35 percent of the U.S. vehicle market, causing rifts among brand faithful and offering more potential (vehicle) cannibalization than the Donner Party. Not to mention both automakers' labor contracts, supplier dealers and slipping market share. Shocked? Don't be. We give it a snowball's chance on the Sun. Thanks to ALL who tipped in.

UPDATE: Official statement from Lori McTavish, Executive Director, Communications, Chrysler LLC:

Chrysler LLC as a matter of policy does not confirm or disclose the nature of its private business meetings. As we have said, the Company is looking at a number of potential global partnerships as it explores growth opportunities around the world. Beyond those partnerships already announced however, Chrysler has not formed any new agreements and has no further announcements to make at this time.

Autoblog

[Plex]

Chrysler and General Motors Begin Merger Discussions

Result would be bigger than Toyota

Talks to create the world�s largest automaker have begun in earnest in what is described as a �50:50 possible� merger between General Motors and Chrysler, represented by its parent company Cerberus Capital Management. Said talks have been going on for about a month and the plan would be to create one company from General Motors and Chrysler, which would then be bigger than Toyota and form what could be one of two US giants alongside Ford.

Times have certainly changed in the past year or so when sales of SUVs, the mainstay of American automakers� profits, have plummeted to such an extent that once-iconic brands like HUMMER are up for sale. GM itself has seen its share price free-fall from about $43 USD per share a year ago to about $5 USD per share today. The company has about $21 billion in cash, but burns through that at a rate of about $1 billion a month. No one from either camp is confirming of denying these talks, but we do know that peripheral talks are going on between Chrysler and Renault/Nissan as well. So where does all this leave Ford?

Worldcarfans

[Plex]

Chrysler letter to employees hints at possible merger

Chrysler � along with the rest of the world�s automakers � has been caught in the perfect storm of a slumping global economy and a tighter credit market. As the saying goes, desperate times call for desperate measures, with rumors popping up over the weekend that Chrysler is considering merging with General Motors. Neither side has confirmed the rumored, but Chrysler CEO Bob Nardelli did little to deny the merger in a letter sent to Chrysler employees on Monday.

In a letter obtained by CNBC, Nardelli revealed that Chrysler is �looking at a number of potential global partnerships.� Nardelli touched on Chrysler�s alliances with Nissan and Volkswagen, but also hinted that more talks have been going on behind closed doors.

�I can tell you that we have approached and have been approached by third parties who are interested in exploring future possibilities with Chrysler,� he said. However, Nardelli failed to mention any specific third parties in the interest of protecting all parties involved.

Although not a full on confession that Chrysler is teaming with GM � or possibly even Renault/Nissan � Nardelli�s letter seems to be priming Chrysler employees for the possibility. Stay tuned as more seems to be unfolding on this drama by the hour.

Leftlanenews