GM, Chrysler hold talks for merger
General Motors has had talks with smaller rival Chrysler LLC about a merger that would combine the No. 1 and No. 3 American automakers.
By Agencies |
DETROIT/NEW YORK: General Motors has had talks with smaller rival Chrysler LLC about a merger that would combine the No. 1 and No. 3 American automakers at a time when both are struggling to cut costs and shore up cash, according to a source briefed on the matter.
Separately, Ford Motor Co plans to sell its shares from its controlling stake in Japan���s Mazda Motor Co, a second source said. Finally, it was reported that GM was preparing to approach the US Federal Reserve about borrowing money from the central bank���s discount window because of the logjam in credit markets that has shut it out of other kinds of borrowing.
The moves come as all three Detroit-based automakers are struggling with a plunge in US sales to 15-year lows and facing tough questions from investors and creditors about whether they have the cash to ride out a deepening downturn.
Representatives of Cerberus Capital Management, the private equity firm that owns an 80.1% stake in Chrysler, were not immediately available for comment.
Chrysler and GM declined comment. Ford representatives could also not be immediately reached. Cerberus is also in exploratory talks with other parties, including Renault-Nissan, to sell Chrysler, the source said.
But any deal would hinge on the completion of the sale of Daimler AG���s remaining 19.9% stake in Chrysler to Cerberus, the source said. Cerberus last month said it had approached Daimler to buy that remaining stake. Chrysler���s private owners and GM have had ���very early��� and ���very exploratory��� talks about a merger, the source said.
Separately, Ford Motor Co plans to sell its shares from its controlling stake in Japan���s Mazda Motor Co, a second source said. Finally, it was reported that GM was preparing to approach the US Federal Reserve about borrowing money from the central bank���s discount window because of the logjam in credit markets that has shut it out of other kinds of borrowing.
The moves come as all three Detroit-based automakers are struggling with a plunge in US sales to 15-year lows and facing tough questions from investors and creditors about whether they have the cash to ride out a deepening downturn.
Representatives of Cerberus Capital Management, the private equity firm that owns an 80.1% stake in Chrysler, were not immediately available for comment.
Chrysler and GM declined comment. Ford representatives could also not be immediately reached. Cerberus is also in exploratory talks with other parties, including Renault-Nissan, to sell Chrysler, the source said.
But any deal would hinge on the completion of the sale of Daimler AG���s remaining 19.9% stake in Chrysler to Cerberus, the source said. Cerberus last month said it had approached Daimler to buy that remaining stake. Chrysler���s private owners and GM have had ���very early��� and ���very exploratory��� talks about a merger, the source said.
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The talks between GM and Cerberus began more than a month ago. Cerberus had proposed a swap of assets with GM that would give the private equity firm full ownership of finance company GMAC. In exchange, GM would get the loss-making auto operations of Chrysler, according to reports appearing in media.Download
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