GM and Chrysler talking merger

[ALS]

The number 1 and number 3 automakers are talking about uniting.

Merger

[er2006]

They should get Ford to join them!

Ed

[shooter357]

They should get Ford to join them!

Ed

Why would they want to do that?

[Emptymag]

The number 1 and number 3 automakers are talking about uniting.

Merger

I just threw up in my mouth a little.



Great. Chevy will finally have hot looking cars, but they won't run worth shit.

Ugh.

[Exbiker]

Long as they don`t take the best American Trucks and try and turn them into GM`s.

[Pector55]

I really wanted to get an idea as to what the results of such a merger would look like so I picked up two of the biggest dog turds in my back yard, put one on top and ran over them with the lawn mower tire.

Seriously, if you know how to change oil, your GM vehicle will run for 200,000 miles on basic maintenance. You just won't be able to afford it because it will get 10-20mpg. Your Chrysler will be a dog because of the 4speed tranny trying to power a 4000lb under powered vehicle.

[Ramtuff]

I wouldn't put too much stock into these reports. The same "experts" have been reporting doom and gloom for Chrysler since Cerberus bought it. First they said it was going to be chopped up and sold off, then they reported mergers with Renault, VW, Nissan, and one or two others...none of which has come true.

The facts is, Chrysler has over $10 billion in the bank, while GM is only worth $3.8 billion and is basically bankrupt. GM already has too many brands, too many models, too many factories, and too many dealerships...why would they add to an already bloated company?

There's no sense in trading Chrysler for GMAC either. GM doesn't need to add the brands/models/factories/dealerships to their own, and just to buy out existing dealer contracts would cost billions, which they don't have. Cerberus already has controlling interest in GMAC, and the remaining 49% is worth much less than Chrysler. Also, losing the remaining interest in GMAC would severely hurt GM's borrowing power.

Let's not forget that Cerberus has invested billions into product development, and is trying to buy the remaining 19.8% of the company from Daimler. The also ponied up big bucks to get Bob Nardelli (former CEO of Home Depot) and Jim Press (former president of North American operations for Toyota) to come on board with Chrysler. Out of the Big 3, Chrysler is in the best shape.

My bet is that these talks are about one of three things:
1) possible collaboration on hybrid technologies, electric cars, and alternate fuels (work together to greatly reduce costs, and speed up development time to catch up to the competitors)
2) working together in overseas markets (GM is hurting overseas and Chrysler wants to expand into that market)
3) Chrysler buying the Hummer brand (although they don't need it, it's a direct competitor to the Jeep brand, and GM is desperately trying to offload the brand)

[Exbiker]

Actually it`s almost all about GMAC and they both own a piece now.

[Ramtuff]

Actually it`s almost all about GMAC and they both own a piece now.

But there's nothing of value in GMAC right now. Cerberus already owns controlling share of it, and has for a long time, but GMAC is in the tank right now. If GM wanted to create some much needed cash and sell of it's share of GMAC (which would hurt GM to do so), Cerberus has the capital to buy it outright, without putting anything but cash on the table. To put Chrysler on the table, which eclipses GMAC in value, doesn't make any sense.

If any merger talk were true, I could see Chrysler buying GM. It could be a cash deal, and they could really use GM's small car platforms, inline 4 cylinders, and transmissions. Right now, there's no possible way for GM to buy Chrysler, even if they toss the remaining shares of GMAC into the deal.