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Chrysler-GM merger could happen by month’s end, Chrysler breakup still possible

10/17/2008, 8:54 AM

By Drew Johnson

Rumors of a Chrysler-General Motors merger surfaced just days ago, but a new report indicates Cerberus Capital Management – Chrysler’s majority stake holder – is ramping up efforts to sell the Detroit-area automaker, whether in parts or as a whole entity.

And a deal with GM could be hammered out sooner than first thought. According to The Wall Street Journal, GM wants to finalize a deal with Cerberus by the end of the month. However, the two sides are still a long way from signing the dotted line, with plenty of details left to be sorted out.

But there is plenty of support for the deal from inside GM as well as from outside business interests. According to Automotive News, GM estimates a Chrysler merger could result in a $10 billion savings and also give GM access to Chrysler $11 billion in cash. Several banks have also been supportive of the merger, including J.P. Morgan & Chase Co. – a major banker for both automakers.

Despite the support for a Chrysler-GM merger, Cerberus is still considering breaking up Chrysler for individual sale. If Cerberus were to go down that path, Renault would join GM in the buying picture. It remains unclear exactly what assets Renault would target in that situation, but it is reported that GM would take over Chrysler’s minivan business and its Mexico truck operations.

A breakup would also likely see Cerberus selling off Mopar – Chrysler’s parts division — and Chrysler Financial.

With so many scenarios and details flying around, it seems like there is plenty left to sort out before a ‘Sold’ sign can be hung on Chrysler’s front door. But with sales dwindling by the day, the urgency of the merger has been increased by all parties involved.

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10/17, 9:25 AM

posted by:

hecti

i really hope gm doesnt get any part of chrysler
chrysler deserves a better a buyer like fiat or Renault, a buyer that would continue to keep the name and most of the cars in the chrysler line up

10/17, 9:26 AM

posted by:

tyler_is_aero_tt

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10/17, 10:12 AM

posted by:

Raven37

i agree with both prior comments but i would rather see crysler stay as they are and try to tuff it out, only resulting in a sale if complealty necessary

10/17, 10:15 AM

posted by:

BMW M1

@tyler: hahahahhahahaha, guess thats all the upper level managers at GM, Chrysler and Cerberus

10/17, 10:17 AM

posted by:

AnonymousCoward

who cares about the Chrysler brand? nobody outside the US, that for sure. the jeep brand seems OK. it could be useful for GM once they get rid of hummer. and then some of chryslers cash and maybe a plant or two that are more modern then GMs own. seems like a great deal. chrysler were screwed anyway after the daimler fiasco.

10/17, 10:56 AM

posted by:

pavlindrom

chrysler 300 is like a bentley in Ukraine…

10/17, 10:56 AM

posted by:

DBro

Uh oh, get ready for the 300C to look just like G6, the Pacifica to look even more like a Cadillac , and every other Chrysler to morph into a Pontiac/GMC/Cadillac

10/17, 10:57 AM

posted by:

Chris C.

For many, many years now, Chrysler has faced serious financial difficulties. Each and every time, Chrysler has been thrown a rope for survival. Whether it be a bailout from the US government, as seen in the 80’s, or more recently by takeover from a European auto giant, they’ve been spared the ax numerous times. How long do you leave a person on life support before you finally realize that you are only delaying the inevitable? I believe Chrysler’s repeated financial and sales problems prove that there is simply no longer a great enough interest and belief in this company. Further, there is simply not room for it in the current or foreseeable automobile market. I would rather see an American company buy Chrysler than have its historic past ignored and tarnished by a foreign buyer.

10/17, 11:35 AM

posted by:

Z06ified

I still don’t think this deal is going to happen, and if it does, it will be a mistake on GM’s part.

10/17, 11:55 AM

posted by:

johnnycanuck

For gawds sake people, it takes 73 layers of internal bureaucracy and blood samples from a herd of rabid Yak to get a headlight bezel approved at General Motors. If this happens by the end of the month I’ll run down to the nearest Mopar store and pay full retail on an ‘08 Ram.

10/17, 12:31 PM

posted by:

RaineMan

So the next Sebring is going to be a rebadged Chevy Cruze?

GM does NOT need to add another brand to it’s fold just so they can keep pushing the same rebadged crap around. No wonder Honda and Toyota sales are up… their cars at least look different.

10/17, 12:32 PM

posted by:

400horseSS

Chrysler suck< GM is in it for Chryslers 11billion in cash the fold up shop wich in turn closes more plant and more job losses, but hey LLN experts (Gay4me, c6racer) agree its the great idea.

10/17, 2:13 PM

posted by:

Lariat Luxury Locomotive Liner No.3

If there is a chance in hell of any of the large American automotive manufacturers to survive it will continent upon removing both the upper executive management the board of directors at least at both GM and Ford—there is no other way. And for those who use the propaganda of “…not changing horses midstream” I say b-u-l-l-s-h-i-t. Hell, let the riders drown and replace them with those who can do the job—the current execs have repeatedly failed and only a moron would fail to understand this fact. It is an egregious shame that the American taxpayer is further throwing good money after bad with these fruitless bailouts that only insure those at the top further money they do not deserve. Bailouts do not work.

10/17, 4:48 PM

posted by:

VWgrouP

You know, I really would hate to see Chrysler be bought out by GM. Even though I couldn’t care less about either automaker, this is pretty serious.
Its sad how Chrysler is slowly slipping below the surface, and into distinction.

10/17, 4:50 PM

posted by:

yarddog82abn

Once there where 3…..
Now 2….
sad day…..
BLUE IS FOR FORD, RED IS FOR CHEVY AND WHITE “WAS” FOR DODGE……

10/17, 4:55 PM

posted by:

global_lightning

Renault buys the sales and distribution network -> Re-enter the U.S. market
GM cherry picks the brands -> Jeep, minivans, Ram
Everything else is auctioned of to Tata, Chery, SSassong, etc…

10/17, 5:52 PM

posted by:

1c3d0g

Merge with GM or die! Don’t let those French pig bastards get a piece of Chrysler!

10/17, 6:16 PM

posted by:

hateful83

Maybe if we didn’t have 40 different automakers to choose from in this country our “big 3″ would survive. I serious don’t know how anyone can survive over here with the competition. There’s literally like 12 cars offered in every class, if not more. It’s to the point of being ridiculous in my opinion. I understand there are other factors that led up to this, but to me this is a big one.

10/17, 8:04 PM

posted by:

DrFill

If my company, JPMorgan, is in on it, count on it gettin’ done
JPMOrgan doesn’t play
They own, baby!

How do I feel about a merger?
Definitely didn’t work with Mercedes
There can be savings, but the redundancies will be more common, and will take many years to pare down.
GM wants to eliminate a competitor, gain some strong brand names (Ram, Hemi, Viper, Caravan)
The management part is where GM will struggle.
They already have brands they can’t/don’t support/sell
This will defintely kill GMC
Gaining a hold of the tech on the Durango Hybrid, for example, will help
There’s a lot of pluses
Lot of minuses, red ink
Interesting, but it will take years to pull off well

DrFill

10/17, 9:56 PM

posted by:

eff1Fifty

everyone here has made several good points in their posts.

How will the Ram fit in with Chevy’s truck line up considering they have the silverado AND the Avalanche?
Will Jeep merge with Hummer? (same grilles)
Will the Chrysler or Dodge name be worth keeping alive?
Will GM sacrifice one of their 35 diff brands to keep a Chrysler or Dodge name?

I think they need a FAQ

10/18, 1:17 AM

posted by:

cereal

Yup, DrFill’s on the right track – the title’s might still stay, but probably the actual thing will be gone.

As little as I care for it, I’d hate to see that happen.

This whole fiasco is getting interesting.

-eat your cereal

10/18, 10:24 AM

posted by:

Payton Byrd

This one is easy. GM sells Hummer to the Indians. GM get Jeep in return. Winner: GM. GM shuts down Buick, Pontiac and GMC. GM gets Chrysler and Dodge, thus allowing GM to eliminate all those awful Buick-Pontiac-GMC dealerships. Winner: GM. The Chrysler-Dodge-Jeep dealers get access to GMAC and high-quality engineering resources.

The more I think about it, the more this makes sense. I’m awaiting to hear about the bloodbath among Buick-Pontiac-GMC dealers.

10/18, 12:16 PM

posted by:

Pauly

Not going to happen.

10/19, 6:11 PM

posted by:

CanadaCraig

The fact that Chrysler may soon no longer exist is very sad indeed.

10/19, 9:41 PM

posted by:

VWgrouP

I agree.

10/20, 1:36 PM

posted by:

MercMark

The end is near…

10/20, 8:12 PM

posted by:

GTRDONE

GM needs to keep the jeep and chrysler/dodge vans going and just ditch all other models from chrysler. chrysler seems to have the minivan market locked down. and jeep is practically its own class of mobility. I heard that GM was dropping the HUMMER brand? is this true? if so… its about time!

10/30, 6:24 PM

posted by:

Dodge2004

This is a sad day for me.

Im wondering whats gonna happen to the chrysler dealerships………..
My gramps opened a dodge dealership in 1945, my dad took it over, now im in 3rd year business with one year till im done wondering what my future looks like.

The american automakers should have seen this coming from a million miles away, but instaed of making fuel effcienet vehicles they lobbied the governemnt to restrict emissions standards. Like give me a break, give your heads a shake.

its just unfortunate how many people are gonna be affected by someones stupidity.

11/01, 2:28 PM

posted by:

chevyman4life

Dodge motors backed by a chevy transmittion would be the best truck you could buy

11/08, 2:41 PM

posted by:

g93

aww this sux…chevy and dodge dont mix, im a chrysler fan and dont want this to happen, they should at least wait to see how the ‘09 ram does

12/01, 11:26 PM

posted by:

tad

I sincerely hope that Chrysler does not merge or sell to GM and that the company is not broken up or sold off GM only wants the $ 11 million surplus dollars Chrysler has in the banks I thought when they were first sold to an American firm it was a good thing but now I think they might have been better off staying with the Germans , Chryslers biggest reason for failing has always been the two other makes FORD and GM. it was not always competition Chrysler never could do any good on account of the labor force and loyalty to these other brands. I think thats the reason the Germans sold them they were on the verge of marketing a better car then FORD or GM makes. the public in this country wont let you do that its the dam labor and Ford and GM unions so because they couldnt market a better car then the other two they were forced to sell their was no future in the company I hope to hell they stay clear of GM thats for sure I wouldnt give them my last penny as much money and life as they have cost me , really FORD too their a bunch of ass holes … now after they cost me my lifes saving and retirement this dam governmet is going to tax me to help save them I wish Celurbus would buy Ford and GM then they would have no worries why dont they merge them with Nissan a great little company and say **** that dirty old mafia GM …. Bob Lutz and Rick Wagner should just tell that entire company to **** off and take their big salerys and all their benefits and leave the crazy bastards ………….

 
 
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