Report: GM, Chrysler Deal Closer

Deal could be completed within two weeks, according to USA Today report.

General Motors Corp. and Chrysler LLC aim to finalize their merger agreement within the next two weeks, or before the Nov. 4 presidential election, USA Today reported on its Web site late Oct. 19.

Citing a source who has been briefed on the talks, the newspaper said the two companies are also lobbying for government financial assistance to help clinch the deal.

A source briefed on the discussions said the talks have intensified as representatives from the companies try to see if the potential costs savings could outweigh the difficulties that come with combining firms with overlapping product lines and vastly different corporate cultures.

Neither company has publicly acknowledged that explicit discussions about a possible merger are under way, however they have done little to squash the rumors and leaks.

According to USA Today, Cerberus Capital Management, Chrysler's parent company, has been pushing to make GMAC, GM's financing arm, a part of the deal.

Cerberus already owns more than 50% of GMAC but wants it all, the paper said.

This demand has been a sticking point because GM has said it won't give up its stake in its financial arm, according to the report.

The merger talk also is being driven by a sharp downturn in U.S. car sales and tightening credit, which has frozen millions of buyers out of the market and also made it harder for automakers to borrow money to keep their plants running amid massive losses.

Copyright Agence France-Presse, 2008

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish