Word: mergered
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...unload its ownership in the car company. However, an executive familiar with the talks tells TIME that Cerberus is not preparing to walk away from its investment. "They're long term investors. They would want to keep a meaningful stake in the combined companies," said the executive. A merger, however, may also be the best way for Cerberus to make good of a bad situation...
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...
...nerger talk has made labor suspicious. A spokesman for the UAW declined to comment on the merger but one told TIME neither company has 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...
...While a merger may make sense in terms of consolidating a troubled industry as a whole, it may not 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...
Among industry analysts, there is also skepticism whether a merger would even work. "I just don't see the benefit to GM," notes an executive from a key supplier. "I can see the value in terms of reducing overlap and reducing capacity," says Laurie Harbour Felax, an analyst with the Harbour-Felax Group in Clarkston, Mi. "But the cost of doing that are so enormous, you have to wonder if it's really worth it," she says. Chrysler also has relatively few products that are not duplicates of those already sold by GM, she said...