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General Motors Corp (GM.N) has asked the U.S. government for roughly $10 billion in an unprecedented rescue package to support its acquisition of Chrysler LLC from Cerberus Capital Management (CBS.UL), sources familiar with the talks said.

The government funding would include roughly $3 billion in exchange for preferred stock in a merged automaker, according to one of the sources, who was not authorized to discuss the matter publicly.

The U.S. Treasury Department is considering a request for direct aid to facilitate the merger and a decision could come this week, sources familiar with the still-developing government response said on Monday.

The request for federal aid is being led by GM. The automaker's chief executive, Rick Wagoner, was in Washington in recent days to lobby administration officials.

Cerberus has not been involved in any of the lobbying efforts, a source familiar with the matter said.

GM has been in talks with Cerberus about buying Chrysler since last month but the discussions have been snagged by difficulty in securing investment or financing at a time when credit is tight and global auto sales are in rapid retreat, others close to the talks have said.

A decision by the Bush administration to provide the government's first funding for the auto sector since the $1.5 billion bailout of Chrysler in 1980 has been widely seen as the merger's best chance for success.

"The automakers are facing a maelstrom and that's why I think an unprecedented government infusion could happen," said Efraim Levy, an automotive equity analyst with S&P.

An injection of $3 billion in equity to support a GM acquisition of Chrysler would be roughly equivalent to the current, depressed value of the top U.S. automaker.

It would also give U.S. taxpayers a large stake in the turnaround of a struggling auto industry that employs more than 350,000 American workers and is credited with supporting employment for another 4.5 million in related fields.

Analysts perceive GM, Chrysler and rival Ford Motor Co (F.N) as driven to the brink of failure by a combination of management missteps, slowing global growth and problems in credit markets.

Now, in addition to taking a stake in what would be the world's largest automaker by volume, the U.S. government is also being asked to provide support by taking over some $3 billion in pension obligations, the first source said.

The final component of the proposed support would be a credit line that could include U.S. government purchases of commercial paper to relieve short-term pressure on liquidity, the person said.

GM could not immediately be reached for comment. Cerberus and Chrysler had no comment.

Full article: http://news.yahoo.com/s/nm/20081028/bs_nm/us_chrysler_gm
 

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Hello nationalization of carmakers!
So taxpayers are supposed to fund this madness. Get 10 billion from the Gov. so that GM can take another 10 billion from Chrysler. That will allow them to survive, what for 10-15 months more? Then what? If GM alone spends 1 billion a month, how much will a combined GMCX spend a month??
 

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Could the so call merger mean, shareing of fuel saveing tecnologies? Between companies? Because I don't see Gm buying chyrsler automobile divisions. Well there media is saying two or three different thing's, that money is for not a gm-chyrsler merger, it's for gm's on need's. As I said before gm is not going too buy chyrsler's car division's.
 

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Hey since everybody is asking gov. for help. maybe we should too. We are all to big to fail. We have mortages. Gov should pay them off too. Since gm can get 10 bil. banks get all of those billions. Well why not us the tax payers. I say if you make bad decision you should fail just like everybody else. If i lose my job who will pay my house payment?????? Gm you made a lot of bad decision and you should fail.
 

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Well... government either helps GM fund the acquisition of Chrysler, or we sit and watch the collapse of GM and Chrysler.
I don't think GM could make the argument well enough that without the merger both companies fail. I also don't think they could make the argument well enough that with the merger the combined company will succeed. My point is that we don't know if the merged company will succeed and that both companies on their own will fail. I'll take my chances, it might force some hard decisions from both companies to survive but you gotta trim the fat sometime.

Either way it's a balls move to ask the government for cash to buyout a company and put tens of thousands of people out of work.
 

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So both companies crash and burn and we are in instant-depression.

I'm not one for bailouts but I'll let it slide this time.
 

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Hey since everybody is asking gov. for help. maybe we should too. We are all to big to fail. We have mortages. Gov should pay them off too. Since gm can get 10 bil. banks get all of those billions. Well why not us the tax payers. I say if you make bad decision you should fail just like everybody else. If i lose my job who will pay my house payment?????? Gm you made a lot of bad decision and you should fail.
yea! i want my $100,000 to pay off my house.
All in favor of the government bailing out those in need say aye.

AYE

no seriously though, why should GM get money to do a big mistake. Instead of buying Chrysler, sell GMAC to Cerebrus and if they want trade that much stake of Chrysler that GMAC is worth to them. So if GMAC is worth 40% of Chrysler in their eyes, then GM should have 40% of Chrysler in exchange of Cerebrus buying GMAC. Its a win win situation. Cerebrus gets GMAC and gets rid of (part of) Chrysler and GM gets rid of GMAC and access to Jeep, the Minivans and the $11 Billion Chrysler supposedly has as well as part of the $25 Billion loan
 

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Hey since everybody is asking gov. for help. maybe we should too. We are all to big to fail. We have mortages. Gov should pay them off too. Since gm can get 10 bil. banks get all of those billions. Well why not us the tax payers. I say if you make bad decision you should fail just like everybody else. If i lose my job who will pay my house payment?????? Gm you made a lot of bad decision and you should fail.
So the big businesses get bailouts that we taxpayers have to pay for...making it that much harder for us to make our mortgage payments or buy cars, etc.

I have bought GM all my life and now in addition they want me to be taxed so they can stay alive? Why am I supposed to pay for failed banks and car companies? This is just a vicious circle. Lose/lose situation.
 

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yea! i want my $100,000 to pay off my house.
All in favor of the government bailing out those in need say aye.

AYE

no seriously though, why should GM get money to do a big mistake. Instead of buying Chrysler, sell GMAC to Cerebrus and if they want trade that much stake of Chrysler that GMAC is worth to them. So if GMAC is worth 40% of Chrysler in their eyes, then GM should have 40% of Chrysler in exchange of Cerebrus buying GMAC. Its a win win situation. Cerebrus gets GMAC and gets rid of (part of) Chrysler and GM gets rid of GMAC and access to Jeep, the Minivans and the $11 Billion Chrysler supposedly has as well as part of the $25 Billion loan
AYE LOL
 

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Hello nationalization of carmakers!
So taxpayers are supposed to fund this madness. Get 10 billion from the Gov. so that GM can take another 10 billion from Chrysler. That will allow them to survive, what for 10-15 months more? Then what? If GM alone spends 1 billion a month, how much will a combined GMCX spend a month??
If GM goes under, you have just eliminated 2.4 million jobs, not including all suppliers. If Chrysler goes down, you have eliminated 500k jobs not including all suppliers. Do you have any idea what this would cause to the economy?

Do you also realize than in 12 months from now, the new UAW contract kicks in which gives GM $15b more per year and Chrysler a few billion as well? Do you also realize that in a few months the UAW agree to delay some payments to allow GM to build itself up?


So if you really want to see 3+ million people on the streets without jobs which will cause some horrible effects on the entire economy then yes oppose to it. Otherwise this is something that needs to happen. This isn't a grant, this is a loan, which GM will have to pay back.
 

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I can believe that the US Gov. (us) will bail out GM with the current management team. Where is the board of trustees of this company. Give the Ford family credit for knowing when to get out of the way.
 

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Well... government either helps GM fund the acquisition of Chrysler, or we sit and watch the collapse of GM and Chrysler.

Or perhaps we nationalize the legacy health and pension costs of the big 3. That likely will put them on a level playing filed with the imports. Also, for laughs, if the Big 3 are union, so will the foreign carmakers in the US.

Then we give loan guarantees to the Big Three.
 

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So basically their trying to say give us the money or else!

I don't see how we could let them just fall apart since they've got so many employees and so many distributors that depend on them...they've made the perfect situation to get all the help they want.

I almost wonder if they didn't try to fail more in order to scare the gov. and the American ppl onto their side??

GM has made bad business decisions. The "media bias" excuse can only go so far.
 

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So the big businesses get bailouts that we taxpayers have to pay for...making it that much harder for us to make our mortgage payments or buy cars, etc.

I have bought GM all my life and now in addition they want me to be taxed so they can stay alive? Why am I supposed to pay for failed banks and car companies? This is just a vicious circle. Lose/lose situation.
I agree. Who will bail you out if you can not make your house payment???? Will GM or CIti bank bail you out??? This is madness. We are revording bad businesses and punishing good once. What do other good companies get from these bail outs. They learned that you should get to big to fail quick and at any cost so that gov. will bail you out. GM and other should go to chapter 11 and emerge as a smaller but profitable company. What will 10 billion do for gm and chrysler??? nothing and what happens then. WIll they be to big to fail again?????? Will we have to bail them out again?????
 

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So the big businesses get bailouts that we taxpayers have to pay for...making it that much harder for us to make our mortgage payments or buy cars, etc.

I have bought GM all my life and now in addition they want me to be taxed so they can stay alive? Why am I supposed to pay for failed banks and car companies? This is just a vicious circle. Lose/lose situation.
Not quite. All the money the govt is going to spend on this isn't going to come out of your pocket. it will come out of the pockets of your kids and grandkids.
 

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Not quite. All the money the govt is going to spend on this isn't going to come out of your pocket. it will come out of the pockets of your kids and grandkids.
Well, sort of.
The government has the power to "create" money out of thin air and not ever really pay it back.
 

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Not quite. All the money the govt is going to spend on this isn't going to come out of your pocket. it will come out of the pockets of your kids and grandkids.
That makes me feel so much better lol. This is just crazy. Lets live on a credit card and hope somebody somehow will pay of our balance. GOV. and GM are two organizations that are run by idiots.
 
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