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Report: GM - Chrysler merger talks on again?
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Around 6:30am this morning, a report on the News4 today ticker claimed that merger talks between GM and Chrysler had started up again.
The report was likely pulled from a story in yesterday’s Wall Street Journal which signaled that the proposed union between two of the big three had been given new life after Chrysler’s owner Cerberus Capital agreed to cede some ownership of the company to GM.
In contrast, the Associated Press is reporting that General Motors denied the report, saying that its position has remained unchanged since merger talks broke off last month. This morning, thestreet.com reported that both GM and Chrysler are low on cash and the revived merger talks could help demonstrate to the Feds that Cerberus will be more flexible in its approach to potential restructuring. This could include everything from relinquishing part of their ownership in Chrysler, to allowing a potential "Car Czar" to distribute those stakes to the UAW or GM itself.
Could this inflexibility been a key sticking point in the failure of the auto bailout bill in the Senate last week?
Considering the failure of the proposed $14 billion auto bailout bill and the apparent inaction of the White House to push through an aid package, their actions would be prudent, if not downright necessary. They would also be a huge flashing red light that sometime soon, one of the big three nameplates will likely go away.
For more info: Read the street.com's coverage of the on-again-off-again merger talks with GM and Chrysler
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