Is GM Readying to Scoop Up Rival Chrysler?

[eric&gen 0]

NEW YORK/DETROIT (Feb. 16) - General Motors Corp. is in preliminary talks to buy Chrysler, a source familiar with the situation said on Friday.

The talks were first reported by the trade journal Automotive News. GM and Chrysler parent DaimlerChrysler AG declined to comment on the report.

Shares of DaimlerChrysler rose in reaction to the report. GM shares slipped at first but then moved higher.

Automotive News, citing unnamed sources in Germany and the United States, said the companies were engaged in high-level talks about GM buying Chrysler Group in its entirety.

The source who spoke to Reuters, however, said it was questionable whether GM would want Chrysler's finance business, having recently sold its own finance arm.

Speculation surrounding a possible sale or spinoff of Chrysler has built since DaimlerChrysler Chief Executive Dieter Zetsche said earlier this week that all options were open for its struggling North American unit.

DaimlerChrysler shares were up 3.5 percent to $72.72 in midday trading on the New York Stock Exchange. GM shares were up 19 cents at $36.63.

Analysts have questioned whether GM would benefit from a merger with Chrysler, since both automakers are struggling with excess production capacity, sliding sales and a heavy exposure to trucks and sport utility vehicles.

David Feinman, a fund manager who specializes in distressed debt with Havens Advisors, said he doubted that GM would complete a deal to buy Chrysler.

Feinman, who does not own GM debt, said both GM and Chrysler have too many overlapping models, and any merger would have to result in even deeper cuts to jobs and output.

"If they do merge, there would have to be massive streamlining and there would be hundreds of thousands of more jobs loss," he said.

He added, "The only one to benefit would be Daimler because they would get rid of Chrysler."

[wissooner 0]

GM, who is already struggling, buys Chrysler, who is struggling? Dosen't make any sense to me. I would be curious to know how this story got started...

[eric&gen 0]

If GM were to buy out Chrysler GM can re badge the Chrysler models. They for example change the name from PT Cruiser to GM Cruiser lol.

[Saddle Bronc 124]

If GM were to buy out Chrysler GM can re badge the Chrysler models. They for example change the name from PT Cruiser to GM Cruiser lol.

More likely, their quality will DROP to that of Chrysler .

(the fact that one of Chrysler's nameplates means "avoid" says plenty)

[Kath 0]

hi

my husband works for jeep in toledo...he is hoping they will give a good buy out figure ... but he doubts it...thats if it goes ahead..

he has worked at jeep for 22 years and has seen how come they went downhill...constantly making more cars than necessary down to not recycling within the plants....at one stage here in toledo the jeeps were parked in many locations around toledo in vacant carparks..we first noticed this trend when i was on my second visit here and i said arent they jeeps in that shopping centre car park..up until then alot at work didnt know they were doing this...he was not impressed either...im just hoping if they do merge that its not going to be a big loss to the plant of employee's...and the quality of the cars stays the same...

i applied for a job there .. took the test and got an email back stating i didnt pass...come to find out they cancelled the hiring no one got a job out of that testing..in my group there was around 120 people sittin with 3 sittings before mine...that was when i thought something was going on back in early january...that test was 6 hours long...

kath

[Ban Hammer 13,619]

More likely, their quality will DROP to that of Chrysler .

exactly what i fear too

[William33 110]

That merger will cause GM to bankrupt.

[pedroh 21]

never considered a chrysler or a gm ever.. Honda, or Honda, or if I had money, BMW or Volvo..

[Heracles 417]

Honda, or Honda,

Is that a civic with an exhaust..

[Reba 2]

it makes no sense whatsoever to have 2 Daimler divisions to merge. Neither one of them make any decent cars to begin with IMO. Just do away with 'em both

The North American auto makers really need to belly up and start making some fuel efficient vehicles. The monster trucks are rediculous in this day and age anyway. Maybe if they start doing that, their sales will go up a bit.

[Nikita2Charles 32]

I like the new Chrysler 300C, very good reminiscent of what america car is all a bout, but this model is very nice and classy.

Edited February 18, 2007 by Nikita2Charles