I’m going to take some time off from ranting about the financial fiasco and the election to write about the latest semi-rumor that has hit the automotive industry.
According to the Oakland Press, Chrysler and GM are considering a merger. The interesting thing about this is that there may actually be some truth in this. Sure, there have been rumors in the past about various companies merging or taking over another company, but this one is making some sense, at least for the long term. Two quotes in the article make this more than a rumor:
Chrysler said Saturday that the company was looking at several different options.
“As we have said, the company is looking at a number of potential global partnerships as it explores growth opportunities around the world,” Chrysler spokeswoman Lori McTavish said in a statement.
Meanwhile, a Chrysler official put the chances of a deal at about “50/50” and a key United Auto Workers official said neither company has approached the UAW. “No one has talked to us about it,” said the official who asked not to be identified.
This follows on the heels of a $25 Billion loan package to the automotive industry (separate from the financial bailout package). Adding to the mix is lower sales in the automotive industry, and the fact that GM is spending approximately $1 Billion a month to keep itself going in this slowdown. Finally, the crunch in the credit markets is going to make any changes in the corporate structure of either company difficult.
Now exactly what is going to happen is anyone’s guess. My guess is that this merger isn’t going to happen – at least anytime soon. I can see that if Chrysler doesn’t live up to Cerberus’s expectations, it will be sold to the highest bidder and Chrysler would most likely cease to exist.
But then again, I’ve been wrong before…