Merger would create world's largest automaker
Reuters Oct 29, 08 1:57 PM CDT
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General Motors and Chrysler have ironed out the major issues in their proposed merger, bringing the troubled giants a step closer to becoming the world's largest automaker. The deal's final form will depend on financing and government support—of which GM is requesting $10 billion—but both companies agree GM chief Rick Wagoner will run the hybrid, Reuters reports.
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OPINION
Bankruptcy is just
what Detroit needs to straighten itself out
Washington Post Oct 29, 08 11:35 AM CDT
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Automakers just got a $25 billion loan from Uncle Sam, but now here GM and Chrysler are again, hat in hand, asking for another $10 billion to facilitate their merger. But the “deal is a lemon,” writes Steven Pearlstein in the Washington Post . Yes, the economy would suffer if GM and Chrysler fail, but even after a bailout the companies would have to shrink 25% and slash around 40,000 jobs.
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Groups writeoff value of franchises as economy shifts into low gear
Wall Street Journal Oct 29, 08 6:36 AM CDT
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Two of the largest chains of car dealers report that their domestic auto franchises have become virtually worthless, the Wall Street Journal writes. The companies took a a combined $51 million in writedowns for the third quarter, reflecting disappearing "franchise value"—the measure of potential profit—for dealerships that sell brands from GM, Ford, and Chrysler.
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Wall Street Journal Oct 27, 08 7:16 PM CDT
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Federal aid may be on the way to facilitate a GM-Chrysler merger, the Wall Street Journal reports. The Department of Energy aims to loan General Motors $5 billion so the merged company can afford layoffs, plant closings, and other integration costs. It could also help GM drum up more investment cash; it needs about $10 billion to make the merger work.
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Lack of progress on merger fuels worries of possible bankruptcies
Wall Street Journal Oct 27, 08 8:12 AM CDT
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GM and Chrysler are both on track to run out of cash before the end of 2009 if a merger or major government intervention doesn’t occur, analysts tell the Wall Street Journal . With credit markets choked and rapidly diminishing reserves, experts say bankruptcy, which would carry massive consequences for the industry and economy as a whole, could be unavoidable.
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Alliance would keep Detroit automaker intact, but expose Cerberus to more risk
Wall Street Journal Oct 21, 08 10:21 AM CDT
(Newser)
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Chrysler is considering joining Nissan-Renault, adding a North American arm to the Japanese-French auto alliance that could rescue Chrysler’s operations, the Wall Street Journal reports. Cerberus, Chrysler’s majority owner, prefers a merger with General Motors, but overlap with a Detroit competitor would likely eliminate half of Chrysler’s 66,000 jobs. A deal with Nissan-Renault would leave Chrysler largely intact.
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A tight credit market is making it tougher for GM to scrape cash together for offer
Wall Street Journal Oct 20, 08 6:59 AM CDT
(Newser)
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A tight credit market and wary investors are slowing GM’s attempts to buy rival Chrysler, and experts say the companies may turn to the US government, arguing that a deal between the two is needed to save the US auto industry, reports the Wall Street Journal. But sources told the Journal a deal between the automakers remains far from done and called talks “tenuous.”
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GM, burning through $1B monthly, seeks a cash infusion, cost savings
Wall Street Journal Oct 17, 08 8:58 AM CDT
(Newser)
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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.
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Japanese giant capitalizing on US automakers' woes
Wall Street Journal Oct 17, 08 4:01 AM CDT
(Newser)
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Toyota is moving aggressively to fight slowing sales with a $250-million advertising campaign that offers zero-percent financing on 11 vehicles. The Japanese auto giant is flush with billions of dollars in cash and plans to use it to boost its market share, just as Ford, GM and Chrysler are at their weakest, reports the Wall Street Journal.
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Company vows to survive, may sell
Mazda stake for cash
Wall Street Journal Oct 11, 08 5:34 PM CDT
(Newser)
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Ford rejected merger overtures from GM earlier this year and decided to ride out its financial issues alone, the Wall Street Journal reports. The GM-Ford talks were “very loose and preliminary, more exploratory in nature than anything else,” a source said. Both companies have denied bankruptcy rumors, but credit rating agencies and analysts have raised concerns about their high rate of spending.
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OPINION
Detroit Free Press Oct 11, 08 1:31 PM CDT
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GM and Chrysler are indeed seriously discussing a merger, sources tell Tom Walsh of the Detroit Free Press , which just proves “how desperately some people want to exit the automobile business.” Both companies are already too big—put them together and they’d be “way, way, way” too big, leading to a mass of layoffs and plant closings “too horrible to contemplate.”
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New York Times Oct 10, 08 9:55 PM CDT
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GM and Chrysler are quietly seeking a merger deal that would create the world's largest car maker and reshape the auto industry. Talks between GM and Cerebrus Capital Management, which owns Chrysler, have a 50% chance of succeeding, sources tell the New York Times . Other sources say the deal has stalled, but both sides are hungry to merge and would act quickly if markets stabilize, the Wall Street Journal reports.
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Economic downturn bad news for cars
Washington Post Oct 10, 08 9:19 AM CDT
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The situation in Detroit looked bleak before the current economic crisis; now, it looks apocalyptic, the Washington Post reports. As GM’s stock fell 31% yesterday. Adjust for inflation, and the company is worth far less now than it was after the 1929 crash. “It’s devastating,” said Michigan Gov. Jennifer Granholm. “Companies that are already slammed by globalization are being slammed by the credit crunch.”
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