GM, Chrysler merger on hold as aid hopes fade: sources

[Blue_Tires]

Source: Reuters

NEW YORK/DETROIT (Reuters) - A deal to merge General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) and Chrysler LLC has hit an impasse after the Bush administration ruled out funding for it, three people with direct knowledge of the talks said.

This puts any merger of the struggling automakers on hold until after the U.S. presidential election, the sources said.

The development adds a new element of uncertainty for the embattled U.S. auto industry as Detroit's political allies warn the sector faces a deepening financial crisis that threatens tens of thousands of jobs.

It also opens the door for Cerberus Capital Management, which owns Chrysler, to restart talks with the Nissan-Renault alliance run by Carlos Ghosn. The private equity firm has seen that option as a backstop to an outright acquisition of Chrysler by GM, one of the sources said.

The sources declined to be named as they were not authorized to discuss the private talks. GM and Cerberus declined comment.



Read more: http://www.reuters.com/article/americasDealsNews/idUSN2735477920081031

---

funny...no way to even calculate all the issues the government has been miserly hard-asses on which would have cost a small fraction of the wall street bailout that was crammed down our collective throat...

[wuushew]

1. Why don't we just buy out the workers?

Ten or more billion dollars could provide up to a six figure salary for several thousand workers for perhaps a decade.


What is the public interest in keeping failing companies on life support?

[last1standing]

4. Its called reinvesting in our infrastructure, which I support.

Loaning (note: not giving) this money, if used properly, could save thousands of jobs for U.S. workers. It also keeps a vital industry on American soil which is necessary in times of war. Without these companies, who would supply our military vehicles?

[wuushew]

21. The government can own and operate its own defense industries

as was done in years past.

The Detroit Tank Arsenal was built, tooled and owned by the U.S. government even though it was managed by the Chrysler Corporation.

[Blue_Tires]

5. if you were to buy out the workers and let chrysler fold

you would also have to buy out the dodge/chrysler/jeep dealerships nationwide... and the dealer franchises are VERY well protected in most states, which would make them very costly to buy out (see: Oldsmobile)

[DainBramaged]

14. And the parts manufacturers, distributors, people who depend on the business

[wuushew]

20. You must not have any faith in Ford or GM to scavage the market share of a dead Chrysler

If the big two end up selling more auto's, would they not also require additional parts manufactured domestically?

In your rebuttal please refrain from you usual anti-Asian tirades.

[DainBramaged]

22. Kiss my ass

[BeatleBoot]

2. I never understood

Why a company with excess capacity would want to merge with another company with excess capacity.

That never made sense to me.

Hopefully, President Obama can help the Big 3.

[mainegreen]

7. I think the logic is to reduce overhead while increasing market share

2 companies with two engineering departments, marketing departments and say 30 lines of cars each, with a combined sales of some number of vehicles down to 1 engineering department, marketing department, 25 lines of cars total, fewer plants, with the plants left producing more volume, with fewer models.

Theoretically I think you would end up with more profit per car, as well as more profit overall.
But that only works if the joined company can maintain market share.

[AndyTiedye]

12. Reduce Overhead = Massive Layoffs

[mainegreen]

19. Of course.

Sadly, I think this is one thing that is inevitable no matter what happens.

[last1standing]

3. As a Detroiter, I think the auto companies need to sort out their own houses before buying others.

I fully support the government loaning GM, Chrysler and Ford money, but only with the stipulations that the funds not be used for acquisitions of other companies, building foreign plants, or boosting executive bonuses.

It does no good for our economy if these companies use our tax dollars to create more jobs in China while cutting jobs here. In fact it would amount to paying for our own destruction.

[Phred42]

6. We DON"T NEED another massive 'TO LARGER TO BE ALLOWED TO FAIL" Corporation

WE MUST break up these parasitic Dinosaurs

Phuck 'em

[DainBramaged]

15. No, X you, go buy your rice or schnitzel this is about AMERICAN jobs

idiot. Gutless wonders who won't put up a profile but will attack the American worker, asshole supreme.

[Phred42]

18. What the phuck are you talking about?

I have been a member of SEIU Local 1 - I'm all for Unions.

Don't try to twist my statements about Corporations into your limited little world.

Wake up. One of the major problems that caused this $700 bln bailout was because of Corporations that are "too larg to be allowed to fail' so the Taxpayers are soaked. Bull-shit.

I wasn't calling for killing either corporation - but they need a different way to fix THEIR problems.

[acmavm]

8. I would have sure put a few billion into here instead of handing

it over to the sticky fingered repuke thieves that caused the economy to crash. Old Hank is just giving money to his buddies. He's not solving a damn thing.

But as long as the little guy's paying the bill I guess they figure it's all good. But who are they gonna screw when none of us have work? Or will they be happy and figure there's nothing more to steal?

[Oerdin]

9. It was a terrible match up.

The two companies don't compliment each other in any way and even over lap in their product lines and in the geographical region they focus on. It makes no sense what so ever. The one and only reason GM wanted to go after this merger was to get their hands on the $11 billion Chrysler has saved up as a rainy day fund while GM doesn't have a rainy day fund because they got raided by corporate raiders who squeezed that money out of them and then dumped the stock. Once again poor management.

[Blue_Tires]

10. agreed

with all the product overlap (the truck divisions alone would be an unsolvable nightmare), the merger didn't make any sense at all

[guruoo]

11. Caveat emptor: Mercedes parted with Chrysler after their reputation was nearly ruined

through the marketing of stripped down 'Americanized' versions of
Mercedes vehicles under the Chrysler brand.

[BeatleBoot]

16. Daimler bought Chrysler for $36 Billion

Then sold it for $ 9 Billion.

I sure would have liked to look at the business case that gave management the go ahead for that one.

It tells me that Chrysler is in deep do-do.

[ben_meyers]

17. And sold it to Cerberus Capital Management

Whose current Chairman is Dan Quayle. I wonder how much he will make when he pulls off a bailout?

[madrchsod]

13. nissan-renault would be a better product fit

jeeps are very popular in europe and renault has some interesting auto`s that are not available in the usa. better merger than gm.