General Motors, Chrysler Merger On The Horizon?
http://www.theweeklydriver.com/articles/1307/1/General-Motors-Chrysler-Merger-On-The-Horizon/Page1.html
By James Raia
Published on 10/11/2008
General Motors and Chrysler are considering a merger despite the volatile economy and plummeting stock values, according to a report on the web site of The New York Times. Two of the auto manufacturers who comprise Detroit’s “Big Three,” General Motors and Chrysler have discussed joint engineering projects for several months. A merger, of course, is a much larger issue. And its feasibility wouldn’t be any easier after GM’s stock has fallen to below $5 per share, its lowest level in 50 years.
General Motors and Chrysler are considering a merger despite the volatile economy and plummeting stock values, according to a report on the web site of The New York Times. Two of the auto manufacturers who comprise Detroit’s “Big Three,” General Motors and Chrysler have discussed joint engineering projects for several months. A merger, of course, is a much larger issue. And its feasibility wouldn’t be any easier after GM’s stock has fallen to below $5 per share, its lowest level in 50 years.General Motors and Chrysler are considering a merger despite the volatile economy and plummeting stock values, according to a report on the web site of The New York Times.
Two of the auto manufacturers who comprise Detroit’s “Big Three,” General Motors and Chrysler have discussed joint engineering projects for several months.
A merger, of course, is a much larger issue. And its feasibility wouldn’t be any easier after GM’s stock has fallen to below $5 per share, its lowest level in 50 years.
Chrysler and GM also have overlapping market segments among the 11 total brands the two manufacturers own.
The possibility of a merger reflects the continuing doldrums of the U.S. auto industry.
Industry analysts have re-adjusted their calculations for several auto manufacturers. Standard and Poor’s, for example, has backed off its assessment for GM. It previously noted the manufacturer had enough capital to get through 2009.
General Motors’ executives are reportedly discussing various options to stabilize the company’s business. Further production cutbacks, according to industry insiders, may include eliminating brands and reducing its vast dealer network.
Privately held Chrysler is also believed to be struggling. Its sales are down 25 percent this year, 12 percent more than the average decline industry wide.
Chrysler's owner, private equity firm Cerberus Capital Management, also owns 51 percent of GM's finance arm, GMAC. Cerberus is reportedly interested in buying the remaining 49 percent of GMAC in exchange for Chrysler's automotive business.
And, according to other media reports, Cerberus is discussing other potential partners for Chrysler, including Renault, Nissan, Daimler and China's Chery Automotive.
Two of the auto manufacturers who comprise Detroit’s “Big Three,” General Motors and Chrysler have discussed joint engineering projects for several months.
A merger, of course, is a much larger issue. And its feasibility wouldn’t be any easier after GM’s stock has fallen to below $5 per share, its lowest level in 50 years.
Chrysler and GM also have overlapping market segments among the 11 total brands the two manufacturers own.
The possibility of a merger reflects the continuing doldrums of the U.S. auto industry.
Industry analysts have re-adjusted their calculations for several auto manufacturers. Standard and Poor’s, for example, has backed off its assessment for GM. It previously noted the manufacturer had enough capital to get through 2009.
General Motors’ executives are reportedly discussing various options to stabilize the company’s business. Further production cutbacks, according to industry insiders, may include eliminating brands and reducing its vast dealer network.
Privately held Chrysler is also believed to be struggling. Its sales are down 25 percent this year, 12 percent more than the average decline industry wide.
Chrysler's owner, private equity firm Cerberus Capital Management, also owns 51 percent of GM's finance arm, GMAC. Cerberus is reportedly interested in buying the remaining 49 percent of GMAC in exchange for Chrysler's automotive business.
And, according to other media reports, Cerberus is discussing other potential partners for Chrysler, including Renault, Nissan, Daimler and China's Chery Automotive.