Word: chryslers
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Turmoil on Wall Street and Main Street has forced the two struggling auto titans to consider the kind of merger that might have been unthinkable only a year ago. In an email monday to Chrysler employees, the company's CEO Robert Nardelli confirmed that Chrysler was holding discussions with potential partners, including GM. "I can tell you that we have approached and have been approached by third parties who are interested in exploring future possibilities with Chrysler," said Nardelli...
Other than that, no one would officially confirm the parties involved in the negotiations. Tony Cervone, GM vice president of communications for North America, said GM was not going to comment on any discussion with Chrysler. "Without referencing this specific rumor, as we've often said, GM officials routinely discuss issues of mutual interest with other automakers," said Cervone. As for Cerberus, Tim Price, an executive with the company said, "I'm not going to comment on private business meetings." But Price added, "Look, everybody is talking to everybody else in the automobile industry...
...outlook is dire for both automakers. Chrysler, as a private company, doesn't release quarterly financial information but it has confirmed that it lost $1.9 billion in 2007. (The German corporation Daimler, which still owns 19.9% of Chrysler said the American carmaker lost $510 in the first quarter of 2008.) GM lost $15.5 billion in the second quarter and is expected to post additional losses when it reports its third quarter results at the end of October...
...approached the UAW. "No one has talked to us about it," said the official who asked not to be identified. "I don't see what we get out of it. We're both way too dependent on trucks and sport utility vehicles," noted the union official who represents Chrysler workers at a plant near Detroit. There are fears that a merger would simply be a way to reduce the workforce. Chrysler has eliminated 22,000 jobs since Feb. 2007, reducing its ranks by approximately 66,000 employees. The company also plans to eliminate another 4,000 jobs next year, making...
...make financial sense given the specifics of GM's situation. While GM has insisted its current reserves of $21 billion can help it weather the economic turmoil and continue its restructuring efforts through 2009, that amount may not be enough to finance a post-merger restructuring of Chrysler. GM is also publicly committed to delivering the new electric Volt automobile before end of 2010 and closing Chrysler plants and technical centers to save cash could violate the spirit of $25 bilion in loan guarantees approved by Congress last month to help American carmakers rebuild - and which emphasized job creation...