GM-Chrysler Talks Pick Up Speed as Auto Sales Stall

GM, burning through $1B monthly, seeks a cash infusion, cost savings
By Clay Dillow,  Newser Staff
Posted Oct 17, 2008 8:58 AM CDT
GM CEO Rick Wagoner is in talks with Chrysler and owner Cerberus over a potential merger with Chrysler, opening a fresh cash supply to the ailing auto maker.   (AP Photo/Bradley C Bower, file)
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(Newser) – Talks of a General Motors-Chrysler merger are on the fast-track, the Wall Street Journal reports, with lenders pushing for a deal to be completed as soon as the end of the month. Amid a historically dismal month for US auto sales, GM is scrambling to shore up a bleeding balance sheet while banks see an opportunity to reduce exposure in the auto industry.

Though a deal is far from solid, GM sees more than $10 billion in cost savings and access to Chrysler’s $11 billion reserves, urgently needed cash for a company burning $1 billion a month. In the first half of this year, GM lost $18.8 billion. Third-quarter estimates project another $2.9 billion loss and 1,500 jobs to be cut in the next several months.