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http://ca.news.yahoo.com/s/reuters/081031/business/cbusiness_us_chrysler_gm

NEW YORK/DETROIT (Reuters) - A deal to merge General Motors Corp and Chrysler LLC has hit an impasse after the Bush administration ruled out funding for it, three people with direct knowledge of the talks said.


This puts any merger of the struggling automakers on hold until after the U.S. presidential election, the sources said.


The development adds a new element of uncertainty for the embattled U.S. auto industry as Detroit's political allies warn the sector faces a deepening financial crisis that threatens tens of thousands of jobs.


It also opens the door for Cerberus Capital Management, which owns Chrysler, to restart talks with the Nissan-Renault alliance run by Carlos Ghosn. The private equity firm has seen that option as a backstop to an outright acquisition of Chrysler by GM, one of the sources said.


The sources declined to be named as they were not authorized to discuss the private talks. GM and Cerberus declined comment.


This week, Ghosn said he sees any deals among automakers involving a cash element as unlikely unless the cash came from outside, such as from the government.


Discussions with Nissan-Renault would likely start with consideration of an expanded product-based tie-up building on an existing deal between Chrysler and Nissan, the source familiar with those talks said.


A merged GM-Chrysler would be the largest automaker by sales, but analysts have cautioned it would struggle to turn around the overlapping Detroit-based operations of two firms that have seen mounting losses tied to a global downturn.


Chrysler, which has seen its sales fall 25 percent this year, said it was moving ahead with a cost-cutting plan and with plans for new vehicles, including a plug-in hybrid.


"We are taking the tough but necessary decisions to stabilize the business in the short-term and making the viable long-term business decisions to restructure the company for the future," Chrysler spokeswoman Lori McTavish said.


GM and Cerberus have been in talks since September, according to sources.


GM had approached the U.S. Treasury in recent days about support for the merger through some $10 billion in new funding that would have included taking an ownership stake in the merged company, people familiar with the talks have said.
 

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Hopefully they don't sit on their buts until the next President is in office. They need to figure this out on their own. I would rather not see them merge anyway, the job losses will be huge and I don't see how it increases their chances for success. They could share platforms and powertrain design without merging.

They could even try and get the dealers together as well and eliminate even more of those, couldn't they?
 

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I don't like any government "bailout" or "assistance" package at all. But, this is a little upsetting. We will bail out Banks and Wall street firms to prevent "systemic economic collapse" (and protect many high paid executives/partners/bankers along the way)...yet when it comes to an American company with a couple million 'middle class' jobs on the line (when considering related businesses..suppliers and the like)...nothing can be cone by the govt?
 

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This at least makes it take longer. I'd rather see them wait a couple more months before deciding what to do than hastily make decisions that'll cost hundreds of thousands of jobs.
 

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I'm just not sure how to comment any longer. It becomes mind-numbing. Will GM or Chrysler even survive? Will a foreign manufacturer take control of this massive manufacturing base in the US and gut it?

Wake me when it's over.
 

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I spotted a unrelated article from the French newspaper "Le Figaro" http://www.lefigaro.fr/lefigaromaga...081031ARTFIG00458--gm-sous-l-il-de-ghosn-.php
who mentionned then GM is under the eyes of Ghosn. Ghosn might grab some brands or doing an alliance less costly then what he taught in 2006.
Ghosn has spread himself too thinly trying to control both Renault and Nissan. He's already mentioned that any interest in Chrysler would be non-cash and relatively small stake (which is not what Cerburus wants to hear).
 

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This at least makes it take longer. I'd rather see them wait a couple more months before deciding what to do than hastily make decisions that'll cost hundreds of thousands of jobs.
I agree. However, the problem they are facing is dire enough that they may not have a couple of months before taking more drastic steps. Today the answer may be to merge their operation and cut 40K jobs. Tomorrow it may be that they individually have to shed 30K jobs each and parts suppliers close their doors. A few months down the line the only solution may be bankruptcy.

The point is that there really isn't a "playbook" to follow here since the landscape is so unique to the situation we are in.

I'm not in favor of a bailout; I never have been. But surely there could be another way that doesn't directly involve a handout from Uncle Sam. Perhaps even if they just got a loan from the US government in return for warrants like they did with Chrysler in the early 80s. At least then the taxpayers make money on the deal.

Regardless, the point is they are each burning through money at a horrific rate. For GM, they need to get to 2010 when the VEBA kicks in and they can shed more jobs via their UAW agreement. In the case of Chrysler, they need a partner and Cerberus has pretty much made it clear they want out.

Its about as dizzying a situation as you can get yourself into. This will end badly no matter what happens, but right now its all about "how we can reduce the total" pain before the situation gets worse. If that means they merge, slash 40K jobs and have a chance to survive and fight another day, then so be it. If it means that they each die individually and we loose 100K jobs, that's obviously worse.

There are going to be very difficult times ahead my friends...I hope you brought your shovels cause we'll be diggin' in for this one.
 

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This can not stand!! The auto industry was crippled partially by bad trade policies and the attempt by the elites to destroy the unions, and extreme envionmentalists that did not include millions of middle class workers and the entire Midwest in their concern for "the environment." Also rich liberal elites have turned their backs on blue collar workers.

CALL THE WHITEHOUSE AND THE GOVERNOR! I just did.

Rich Wallstreet snobs were given instant billions the minute they got into trouble after sneering at the auto industry for decades. Apparently they decide who is too big to fail. WRONG!!

We will fight this with everything we have. Vote and volunteer for Obama. We will never, never surrender. Do not lose heart. You are not alone.
 

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Ghosn has spread himself too thinly trying to control both Renault and Nissan. He's already mentioned that any interest in Chrysler would be non-cash and relatively small stake (which is not what Cerburus wants to hear).
I agree. Stéphane Dumas has a point that Ghosn may still try to do something, but it may be less likely since credit markets are restricted and Ghosn doesn't want to expell the capital to do it. Renault is still in debt and only Nissan is making a (small) profit. It would be a really rough ride unless Cerberus sought to just give the company away.

However, I wonder if there would be a way for Cerberus to do this on their own and guarentee GM a loan? IF their main goal is to get their hands on GMAC, then perhaps they could give GM or loan GM a significant amount of money in return for an even higher stake in the combined company then they had planned. This would allow them to get the transaction done while still getting the needed liquidity to make the merger work.

Just a thought.
 

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We will fight this with everything we have. Vote and volunteer for Obama. We will never, never surrender. Do not lose heart. You are not alone.
I don't know about anyone else...but when someone tells me to vote for Anyone....one of two things happens: 1. If I already know who I'm voting for...no matter what anyone else says will chang my mind. 2. If I really can't decide who to vote for...telling me to vote for one candidate might actually sway me to vote for the other one instead because I don't like being told what to do by someone else.

In my opinion, politics can be part of these forums...but only as related to the auto industry...and NOT partisan politics (my side is better than your side stuff). I really wish all the partisan stuff would just end and people would be smart enough to not bring it up. It doesn't change anyones mind...all it does is take threads about auto industry issues and turn them into political fights.
 

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I don't like any government "bailout" or "assistance" package at all. But, this is a little upsetting. We will bail out Banks and Wall street firms to prevent "systemic economic collapse" (and protect many high paid executives/partners/bankers along the way)...yet when it comes to an American company with a couple million 'middle class' jobs on the line (when considering related businesses..suppliers and the like)...nothing can be cone by the govt?

You forgot to mention the tax cuts for companies making money!

Exxon-Mobile just stuck $ 14.83 billion dollars...( or $14,830,000,000.00 if you prefer) in their pockets last quarter and John McCain wants to give them a tax cut. WTF?
 

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You forgot to mention the tax cuts for companies making money!

Exxon-Mobile just stuck $ 14.83 billion dollars...( or $14,830,000,000.00 if you prefer) in their pockets last quarter and John McCain wants to give them a tax cut. WTF?
That tax cut goes towards investment and creation of new jobs, smart guy. Exxon-Mobil is a MODEL for how a corporation should be run, with, in my opinion, the finest financial management and investment allocation record in private enterprise. They earn every cent in profit they make.
 

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We will fight this with everything we have. Vote and volunteer for Obama. We will never, never surrender. Do not lose heart. You are not alone.
I commend your passion for the industry kenmi, but please, don't bring politics into this.

nsap and the rest of the admins/mods have been firm on this issue. Some of us haven't seen all the threads out there (there are only so many of us) but we have gotten emails and personal messages from folks about "campaigning" on GMI.

One small comment can lead to a run-away post on Right v. Left ideals. We want to avoid this.

TO EVERYONE: I know this is a heated political season, but PLEASE leave politics out of it and just focus on the topics at hand. If you want to talk about politics, go to the Snake Pit forum or elsewhere.

If that doesn't happen, we may have nsap or other mods in here calling tho shut down the thread. I don't want that since this thread topic is important to GM fans and auto enthusiasts out there.

Thanks fellas.
 

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This can not stand!! The auto industry was crippled partially by bad trade policies and the attempt by the elites to destroy the unions, and extreme envionmentalists that did not include millions of middle class workers and the entire Midwest in their concern for "the environment." Also rich liberal elites have turned their backs on blue collar workers.

CALL THE WHITEHOUSE AND THE GOVERNOR! I just did.

Rich Wallstreet snobs were given instant billions the minute they got into trouble after sneering at the auto industry for decades. Apparently they decide who is too big to fail. WRONG!!

We will fight this with everything we have. Vote and volunteer for Obama. We will never, never surrender. Do not lose heart. You are not alone.
I just spit coffee all over my desk in laughter. You're fighting the rich liberal elites by voting one into the White House?!

And the unions can't die soon enough.
 

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:barf:
wescoent said:
Exxon-Mobil is a MODEL for how a corporation should be run...They earn every cent in profit they make.
 

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Financing from the government should have been a second option all along. GM and Chrysler either seperately or together should have been working months ago to get their operations in order so that they wouldnt fail. GM spends money in the most ridiculous ways (G3 anyone?) and really needs to evaluate what their product mix/focus should be.

When Pontiac was going to be a poor mans BMW, that made sense. Having a Traverse, Acadia Enclave and Outlook, bad idea. If each brand had a specific focus and wasnt trying to sell 10Mill units per year, GM would survive, but that is not what GM is doing today. They just seem to be flailing around hoping something will stick. I know funds are short but cut programs that arent necessary. As much as I love the GMC Sierra Denali, it has nothing special that you cant get on a Silverado now. Some may say its a cheap way to more sales but GM doesnt have the spare capital anymore. Either make them distinct or get rid of them. ALL Sierras should be upscale Silverados. There should be no Yukons except for Denalis. Get rid of the Outlook today.

Honestly, I could go on and on, and I think we all could. GM, no one, not even your competitors, want to see you fail, but why must you insist on making bad decisions in a troubled market?
 

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True, politics have a divisive nature not needed when we already have Toyota fanboi's
on here dragging down public opinion of GM.

All that should be said is that if the continued future of GM is an important factor for you, you should research which candidate has pledged what to the auto sector.

Then, sit back and see if they actually are able to deliver.
 

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That tax cut goes towards investment and creation of new jobs, smart guy. Exxon-Mobil is a MODEL for how a corporation should be run, with, in my opinion, the finest financial management and investment allocation record in private enterprise. They earn every cent in profit they make.
You have to admit though that its slightly easier to run a company that sells product EVERYONE uses, directly or indirectly, especially over the last couple years. They can also thank speculators.
 
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