Update: GM has released a statement denying the report made by the Wall Street Journal that it is holding merger talks with Chryler. “There are no talks going on,” GM spokesman Tony Cervone told Automotive News. “Our position has not changed at all since November when we said we are concentrating on our liquidity situation.”
It was reported earlier this month during the congressional hearings that a GM/Chrysler merger may be back on the map after GM CEO Rick Wagoner ended talks in November. Nardelli told the Senate committee during the hearings that a merger between GM and Chrysler would save $8 billion to $10 billion a year through plant reductions, job cuts and sharing the cost of development.
Wagoner supported the idea and said that the UAW should be involved in the negotiations. Sen. Robert Bennett, R-Utah, went as far as saying that the government should require a GM/Chrysler merger to be a condition of giving loan money to the two companies.
Well, it’s no surprise now that Detroit’s Big 3 didn’t get their bailout. According to a report by The Wall Street Journal, Chrysler and GM have reopened merger talks. According to WSJ, Cerberus Capital Management, which owns 80 percent of Chrysler, restarted the talks just a week ago.
The paper cited sources that are close to the talks and said that the renewal of talks could be a way for the company’s to show Washington that it wants to cooperate in restructuring the auto industry that has taken a severe beating. Sources said that Cerberus is also looking to protect its stake in GMAC LLC and Chrysler Financial, which play a significant role in Detroit’s Big 3 survival.