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GM, Chrysler Revive Merger Talks
Chrysler's private equity owner signals willingness to give up a stake
By Rob Quinn
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Posted Dec 18, 08 1:46 AM CST
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(Newser)
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General Motors and Chrysler are back in merger talks, reports the Wall Street Journal. Negotiations fizzled weeks ago as both companies viewed a merger as impractical and a potential distraction from federal bailout talks. Chrysler owner Cerberus Capital Management took the initiative to restart talks, and has signaled a willingness to give up some of its stake in the automaker. The move may be viewed by federal lawmakers as a sign that the companies are willing to go the distance to help save themselves.
Cerberus has so far resisted calls to inject cash into Chrysler, which is rapidly running out of funds and announced yesterday it's closing all its plants for a month. The buyout firm—whose equity in Chrysler has been valued at zero by minority stakeholder Daimler—owns both GM's former financing arm and Chrysler Financial, and its priority is believed to be protecting its investment in both.