Advertisement
Find a Car
Go!

Chrysler/GM Deal Close, Says AP

Follow Marty


Chrysler pentastar

Chrysler pentastar

Enlarge Photo

A GM/Chrysler deal, while still a speculative move, rings in as an increasingly strong possibility, claims a number of industry insiders, including "a person familiar with the negotiations," said the Associated Press, the Detroit News reports today. Insiders claim that the pace of talks between the two companies has recently increased, and the same individual mentioned above, speaking on condition of anonymity, notes that officials from the two struggling auto giants "were trying to work out a deal by the end of the month."

The source said that top execs from both companies have considered a specific deal and even asked for alterations. GM's interest lies in Chrysler's approximately $11 billion remaining in cash and assets from stockpiles that were as high as $11.7 billion on June 30, according to Detroit News. GM, on the other hand, is charging through about $1 billion per month, and has lost $57.5 billion in the last 18 months. Therefore, Chrysler's $11 billion could conceivably buy GM more time as it fights to avoid bankruptcy and waits out the slump in auto sales, the credit crunch, and the general market malaise. And finally, as Detroit News says succinctly, "Cerberus wants out of the auto business."

The same insider source claims that Cerberus would ask for GM's remaining 49 percent stake in GMAC Financial Services, of which it currently owns 51 percent. Cerberus might also get an equity stake in GM, which would yield a good return when auto sales rebound.

For Marty Padgett's in-depth look at how this merger might proceed, and what types of automotive divisions and vehicles might result, check out his report from October 11.

In Greek mythology, Cerberus is the multiheaded dog that guards the gates of hell, keeping the condemned writhing in flames across the river Styx. The question no one can answer at this point is which is a worse hell for Chrysler: stock freefalls and a resentful ownership by Cerberus, or being eaten alive and digested by a starving GM?--Colin Mathews
Advertisement
 
Follow Us

 

Have an opinion?

  • Posting indicates you have read this site's Privacy Policy and Terms of Use
  • Notify me when there are more comments
Comments (10)
  1. GM has 8 brands (Chevy, Cad, Pontiac, Buick, GMC, Hummer, Saturn, and Saab). Add 3 more brands (Chrysler, Dodge, Jeep). You get a company that sells one-third more cars in the US than Toyota, which has 3 brands.
    What's wrong with this picture?
     
    Post Reply
    Vote
    Bad stuff?

  2. Ok, everyone has knocked Chrysler for all these years but is seams that they are the only American company making money. I wonder even if the governmant would let this happen, or what the UAW would do. Even if the deal goes threw this is going to take a while. But if it does go threw this is not a good thing. At least 40,000 jobs will be lost from the get go. Then dealers and employees are next,techs,salesman, parts and service managers. hundreds of thousands of jobs. No mater how you feel about the American auto companys this is not a good thing. GM will swallow Chrysler and take them down with them. Nothing can save the sinking GM ship. This sounds like the Daimler takeover where they used Chrysler for there cash pile, chewed them up and spit them out but at least they where still surviving by a thread. Make no mistake GM will destroy what is left of Chrysler and its work force. All they want is the 11 billion dollars. I can answer Martys question: GM is worse because it will cost this nation jobs end a great story in American auto manifacturing when it does not have to. GM will go down with or without Chrysler.
     
    Post Reply
    Vote
    Bad stuff?

  3. Does anyone else find the business world as non-sensical as I do? CDS, Derivatives, and now GM buying a company to get to its cash reserves. Buying something was supposed to cost you cash. I have a much easier time understanding Astro Physics that the incoherent babble that business men spew to trick people into parting with their money.
     
    Post Reply
    Vote
    Bad stuff?

  4. GM needs THREE Things from Chrysler
    1.. Its MINIVANS. After all, Chrysler INVENTED them, and had the best minivans until the Honda Odyssey was introduced.
    2. The JEEP brand, esp. after GM gets rid of stupid HUMMER,
    and, most importantly,
    3. GM Should buy Chrysler so that NO Import maker such as Nissan, TOyota or whoever buys it and inherits its huge dealer network in the US.
    Apart from jeep and the Minivans, all the rest of chrysler brands, even its grotesque niche vehicles such as the Viper, are 100%, USDA choice, unreliable, low-rent crap, and should be discontinued.
     
    Post Reply
    Vote
    Bad stuff?

  5. Lets see Ed, if Chrysler is making what you call low rent crap why are they making 11 billion dollars when Ford and GM are losing money? Also there are thousands of Sebrings Avengers, 300s etc, (I just traded in a 01 PT Cruiser with 120,000 miles on it that had 0 problems) with well over 150,000 miles on them. i myself have freinds with Grand Cherokees with 300,000 miles on them. But you never hear about those because of the old American car "perception". Yes Daimler cheapend up the interiors but that is being corrected. So I have to go move some things in my freinds Ram with 250,000 trouble free miles on it. P.S the grotesque niche Viper beat the ZR1'1s time around the Nurburgring in Germany
     
    Post Reply
    Vote
    Bad stuff?

  6. Bigoted GARBAGE. I have PLENTY of friends that have Grand Cherokees and they like them, BUT they are UTTER PIECES OF CRAP reliability-wise, they break down all the time. And I could care less about the experience of ONE consumer, I can READ the statistics based on 100,000 of owner-submitted data to publications that DO NOT ACCEPT ADS, and hence are utterly UNBiased, such as CONSUMER REPORTS. AND in fact, I have got TWO, not ONE, Contracts and had two teams working on how to reduce Chrysler's WARRANTY COSTS that were KILLING IT back in 1999-2000, out of 20+ models, only ONE OR TWO were reliable (townm and country, in fact).
    PS When you got something SERIOUS to say, come back.
    FAR BETTER domestic brands (PACKARD! which once was more prestigious than even ROLLS ROYCE and all heads of state were driven in them) went broke in the 50s and nobody did a thing. Chrysler and the other 2 one time big 3 lost HOME GAMES 30 years in a ROW to the imports and blamed EVERYBODY BUTZ THEMSELVES. Now they want the US taxpayer to bail them out too, and make them the biggest welfare queen. Great!
     
    Post Reply
    Vote
    Bad stuff?

  7. Dave - Having worked on Grand Cherokees myself, I mostly weigh in with Ed that many of the parts and pieces were low-rent, at least trim and electronics. BUT THAT CHASSIS, and the engine, holdovers from AMC, were bulletproof, awesome results of great engineering from brighter days of good American engineering. The long-lost, sorely missed 4.0-liter Jeep inline-six was a paragon of smooth torque and bulletproof reliability. It had its origins in a fantastic AMC inline-six from the 1960s. Guess what? Rather than update it to meet modern emissions standards, Chrysler killed it and gave us the 3.7-liter V-6, an unhappy, rough, and underpowered 90-degree V-6 that was simply a V-8 with two cylinders lopped off. Quick and easy, small investment, and Jeep aficionados, understandably, hate it. Old Grand Cherokees had the 4.0. New Grand Cherokees, as their base engine, have the gutless 3.7. That is not progress. America has done - and can do - much better. The GC with the German-built 3.0-liter Mercedes turbodiesel V-6 is, on the other hand, impressive. Come on, America. No more excuses.
     
    Post Reply
    Vote
    Bad stuff?

  8. Ok Ed, I am back. Get this straight, GM is going to go for government loans to stay afloat or by Chrysler. Either way we are going to pay for it. On the other hand, if you perform regular maintenance which the American automakers are less expensive to maintain the cars will run forever. My freins with Jeeps, 1 has 310,000 miles on it. No engine, trans or axle work. Just regular maintenance. Yes Chrysler had some issues in the mid 90s. But let me tell you, all car makers have issues import or domestic you just hear about the American autos more that the others- FACT. Chrysler has brought there quality way up and warranty issues way down why? Because they saw a problem and they fixed it, whats wrong with that.
     
    Post Reply
    Vote
    Bad stuff?

  9. "Dave
    October 21st, 2008 - 1:52 pm
    Ok Ed, I am back. Get this straight, GM is going to go for government loans to stay afloat or by Chrysler. Either way we are going to pay for it"
    This is old news, the Govt already gave the big 3 (onetime big, and onetime 3) $25 billion in loan guarantees. I would have preferred it if the Govt would buy shares outright, we the taxpayers would have made a killing, like we did in 1980 again with Chrysler when Carter bailed it out.
    Note that it is NOT just GM that is interested in Chrysler, but also RENAULT-Nissan.
    Would you really prefer that Chrysler is bought and dismembered by the Franco-Japanese rather than by GM?
    At issue is the huge CHrysler Dealer network, which is even more important than the Minivnas and the JEEPS.
     
    Post Reply
    Vote
    Bad stuff?

  10. "would you prefer Chrysler is bought by Franco Japanese" Depends what you wnat. If youw ant to maintain a proud american name and continue to make cars, trucks and Minivans then a foreign buy-out is thepreferred option. If you wnat to just mainatin a pretence of American pride but willing to sacrifice those brands and manufacturing jobs then fine let GM buy them and they can all go down.
    What is bad about GM buiyng Chrysler? It will only make GM's problems worse - more of the same cars in the same market place with too much production capacity and even more debt (after they pay for firing 40,000+ employees).Minivans? serious not much of a point for GM. Jeep? Seen where the SUV market is heading? How many SUV's/Crossovers does GM already have?
    Mini, Rolls Royce, Bentley, Jaguar, Land Rover and Aston Martin are doing much better since ditching British and American leadership. Choices are swollow some pride to keep these companies alive go down the patrioitism line and see them die.
     
    Post Reply
    Vote
    Bad stuff?

 

Have an opinion? Join the conversation!

Advertisement
Advertisement
Try My Showroom
Save cars, write notes, and comparison shop with hi-res photos.
Add your first car
Take Us With You!
   
Advertisement

 
© 2014 The Car Connection. All Rights Reserved. The Car Connection is published by High Gear Media. Stock photography by izmo, Inc. Send us feedback.
Advertisement