GM ChryslerWord broke last night that General Motors and Chrysler have had talks over the last month where they’ve explored a combined “GM-Chrysler.” It’s unclear how far along the talks are, but various news outlets have inside sources that say right now the chances of it actually happening are "50-50."
Whatever is going to be worked out is on hold for the moment, however. The Wall Street Journal has a source that says the current financial crisis has both sides going back to their sidelines and dealing with their own immediate problems. Talks could resume soon. The New York Times first broke the story and reported that a series of meetings have already occurred—some between the two companies’ most senior managers.
Chrysler is owned in large part (80.1 percent) by Cerberus Capital Management. They’ve been in talks with various manufacturers since the 2007 buyout; Nissan / Renault is another potential merger candidate if this GM deal falls through.
As the New York Times points out, a combined GM-Chrysler would potentially help both sides with product development, dealer density and brands. Oh, just image the badge engineering in our future…
The Detroit News has one of our favorite quotes about the situation:
David Healy, an auto analyst at Burnman Investment Research, said auto mergers have a bad track record. "You would think Chrysler would have learned its lesson," Healy said. "They have primarily destroyed shareholder value."
What are your thoughts?
+ GM-Chrysler news roundup (Google News)