It was a pretty bad week for the US financially and the auto industry was far from immune. But despite our best efforts to drown our the sorry, it just keeps on coming
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 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?
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. View the attachments for this post at: