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GM, Chrysler exploring merger: reports

TOM KRISHER

The Associated Press

Latest comment posted at 12:53 PM EST 12/10/08

New York Times and Wall Street Journal report auto makers have been in talks; companies won't officially confirm or deny discussions ...Read the full article

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  1. RS IslandReader from Canada writes: Anyway you look at it, zero zero = zero
  2. benny ben from Montreal, writes: The stocks of GM & Ford are cheaper than a happy meal. If it continues it's just a matter of time before they go bankrupt. That's not good news.
  3. Paul MacEachern from NS, writes: One time this would have been big news . Now they are insignificant companies going to zero. Like it was said here already 0 0 = 0
  4. D JL from Canada writes: Survival...That is what this is about. Banks are restricting loans, people are going broke, and N.A. companies haven't bought into the whole economy bite. One or the other, maybe both, will be bankrupt in 1-3 yrs. Merging probably won't save the day.

    And there goes another batch of Auto jobs in Ontario & Quebec.
  5. Jonathan T from Canada writes: I don't see how this will save them.

    I bet this is how it goes. They get into talks this weekend. Next week on the stock market people are expecting a merger. Then the merger talks fall apart. Then everyone loses hope, credit is pulled from the company, and we here at the end of the week that 400 billion in debt and 400,000 jobs are let go. Credit freezes to all companies. Ford goes under. 200 billion more in debt is defaulted on, stock markets reach near zero. All their suppliers file for bankruptcy. Then every steel and half of the plastics companies in the world goes under. Then the mines shut down and demand for oil drops to $10 a barrel. Tar sand operations seize. Another 1 million jobs let go. Then another million. Home prices sink to a quarter of their previous worth. Foreclosures skyrocket. Banks in Canada are nationalized. US Treasury files for bankrupcty. China demands repayment of debt and demands US national assets such as oil and mines. US citizens outraged. War is sparked. WW3.
  6. A B from Calgary Area, Canada writes: The two make some of the highest rated Auto's in the World.

    The Chrysler 300.... is the most 'awarded' auto in automotive history.

    Buick has higher reliability/build ratings than Toyota

    Fact not Fiction.

    And made in Canada.

    Stop bashing our work and automotive design
  7. Anti Elvis from Calgary, AB, Canada writes: AB. Funny, consumers seem to think different and since we're in a market economy, the consumer is right.

    I bet they ask for loans for a bailout. Privatize profits, socialize losses. The new world order
  8. The Bubble from Canada writes: Great, now their cars will be twice as bad.
  9. steve allan from Canada writes: I posted a message earlier this week stating that Chrysler was on the verge of bankruptcy. You hear a lot about Ford and GM's financial condition because they are both publicly traded companies, but it's harder to gauge what is going on with Chrysler because they are privately owned.

    However, I have an excellent source at the company that tells me things are very bad and the company is no longer a going concern. The private investors cannot keep pumping money into it because their source of funding has dried up.
  10. Carl Hansen from Canada writes: If I had a spare 5 billion i'd buy Ford and GM. Ford is on the right track and GM has assets and all you have to do there is fire Bob and his Volt.
    I guess Warren B would rather lose his shirt backing a bankrupt GS.
  11. pants 7 from Japan writes: It would be better if they went bankrupt. Companies like Magna, Navistar, TRW, Gillig, Budd Company, or Bombardier could pick over the bones.
  12. Tiu Leek from Here, Canada writes: I suggest some of you starting taking this seriously. GM & Chrysler holding merger talks is not a good sign.
  13. Sweeney Todd from Oilberta, Canada writes: D JL from Canada writes: Survival...That is what this is about. Banks are restricting loans, people are going broke, and N.A. companies haven't bought into the whole economy bite. One or the other, maybe both, will be bankrupt in 1-3 yrs. Merging probably won't save the day.

    And there goes another batch of Auto jobs in Ontario & Quebec.

    ==========================================

    Batch of jobs? You & Paul "one time this would have been big news" MacEachern should appreciate just what is at stake for ON - and the country - here. It's not just the assembly plants, folks - it's all of the auto parts; all of the spin-off jobs. Canada's most populous province - the economic engine of the entire country for decades - is about to be torpedoed.

    This has the very real potential to be Ontario's "Katrina". The fallout from this will damage the economy of the entire country.
  14. F Isher from Canada writes: As much as consumers may be fed up with the large engine syndrome at the North American car makers and think the pathetic corporate leadership needs a good smack-down, if they go under, imagine not only the lost employment but the numbers of pensioners that will be hurt.

    We'll all be hurt if that's the way things go.
  15. dave charlston from toronto, Canada writes: 1 losing company plus 1 losing company = 1 bigger losing company
  16. Don Portz from Trochu AB, Canada writes: So many of you posters who virtually are delighted that GM, Chrysler, Ford may go bankrupt. If they do the impact on Ontario and Quebec and in fact Canada will be devestating. A loss of some 300,000 will occur when you take into account all the support services, including MacDonalds etc.
    Be careful what you wish for, it may come true.
  17. dave charlston from toronto, Canada writes: Now that gas is falling again GM can go back to building those tanks and everything will be ok again.
  18. Misery No one from Toronto, Canada writes: The Volt is another Edsel. And it will take more than a K car to bail Chrysler out. GM at 4.00 per share tells the whole story.

    The back of the auto industry in north America is broken and can't be fixed. Thanks to the unions they have finally destroyed the hand that was feeding them.
  19. Dick Garneau from Canada writes: American auto manufacturing plants built what they thought people wanted, not what they needed. They had a long lead time to re-tool but they didn't read the writing on the wall. Not sure a merger will save the day?
  20. halcyon days from Canada writes: Reminds me of the days a while ago now when a then struggling Eastern Airlines held talks with an equally struggling Braniff Int'l Airways (Braniff "#1" that is). The merger never did happen, but then neither did these two 'trunk' air carriers survive.

  21. Rick Jolly from writes: Surely the wise USA government won't let these morbid companies fall and cause an economic collapse? After all, jobs are at stake. It's for the good of the people.

    Poor USA taxpayers. I'm really feeling for your children.

    The next bubble to burst is your currency. Don't worry though. They'll be plenty of sweat shop jobs creating products to ship to the wealthy chinese.
  22. Veritas Canada from Canada writes: Nobody wants to drive a GM or Chrysler anyway!
  23. Ralph Bishop from Hong Kong writes: I never understood how Cebrius figured it could operate Chrysler.
    The culture of this company could not be managed or transformed by Benz, so how could a complete stranger to the auto industry, with no expertise or synergies get it turned around ?

    Combining Chrysler with GM may the the only hope for both.

    The alternative - a lot of workers and retired auto workers with
    greatly diminshed pensions.
  24. Ralph Bishop from Hong Kong writes: halcyon days from Canada writes: Reminds me of the days a while ago now when a then struggling Eastern Airlines held talks with an equally struggling Braniff Int'l Airways (Braniff "#1" that is). The merger never did happen, but then neither did these two 'trunk' air carriers survive
    ---------------------
    Eastern's demise was a gift to Cathay Pacific in HK. Asian routes were suffering from severe undercapacity and Cathay simply could not get additional planes in a short time. Eastern's L1011's were a perfect fit in Cathay's fleet, and served them well for well over a decade. The only downside was that Eastern had cut back on maintenance, forcing Cathay to spend a lot on repairs.
  25. Steve Church from Canada writes: A merger won't correct two fundamental problems - union-dominance and too much complexity. GMs solution is to produce even more new models designed with even more new built-in inventory parts problem. GM even fessed up to it - matching quality didn't level the competition field. It's not that they didn't build what the market wanted; they built into a segment where they could compete when $2500/unit of union benefits were added to the price. When that segment collapsed, it hastened their downsizing trend. The American auto-building industry is doing fine - with non-union crews working for European and Asian brands.
  26. Stuart Seeley from Toronto, Canada writes: I think GM could learn a thing or two from Chrysler... but I fear it will be too little too late. I had to rent a car recently due to a claim, and after living with that 2009 pontiac g5, for a few days... I can't believe how terrible the car is.... it even cut me when I tried to close the trunk... it made me wish I held on to my 1998 Dodge Neon!
  27. Rollo T from Belgium writes: A B from Calgary Area, Canada writes: The two make some of the highest rated Auto's in the World.

    The Chrysler 300.... is the most 'awarded' auto in automotive history.
    --------------------

    Sure, an 'S" class Mercedes chassis for half the price and a lesser name. With the 3.5 litre, heart stopping acceleration. I can only imagine the 4.8 litre hemi with Canada's relatively cheap gasoline prices.

    Except that diesel has better acceleration, more power and better fuel efficiency, especially with a 6 speed standard transmission. Don't make that? Ain't buying.
  28. Carl Hansen from Canada writes: The L1011 with RR engines was a great airplane.
  29. Hung Long from Hong Kong writes: This is like two drunken panhandlers trying to hold each other up.

    Buddy, can you spare $10 billion?
  30. Robert Dryburgh from Winnipeg, Canada writes: They will have to build a better car for less money. Unfortunately it is probably too little, too late. I think the lack of foresight is the responsibility of both the manufacturers and unions. The victims are the workers.
  31. Jack Jones from Canada writes: Merry Xmas !!

    Workers of GM and Chrysler unite!

    Doesn't GMC stand for Give me Chrysler anyways?
  32. m. r. from Canada writes: GM and Chrysler; 2 sick companies merging( unlikely as GM is richer, so it will be a GM takeover) to make an even bigger sick company.
    Cerberus must be happy as it gets Chrysler off its hands or gets better value shares with a GM label. neither will succeed until there is a change of management. Chrysler would be better off merging with or being taken over by Nissan. in any case, the result will be a
    reduced company, with the possibility that the Chrysler name will go
    if GM takes over. just my opinion!
  33. Rusty Waters from Canada writes: Two losers getting together...sounds like a title for a tear in your beer drinking song. They could covert the SUV to mini homes for the those of us who will be on welfare after the crash next week.
  34. Steve D from Canada writes: A B from Calgary Area, Canada writes: The two make some of the highest rated Auto's in the World. -------------------------------------------------------------------------------------------- Do they? http://www.daimlerchryslervehicleproblems.com/
  35. ken g from Canadian in Cuernavaca, Canada writes: I wonder how much a financial institution(s) will make on the transaction? M&A is (was) big business!
  36. Ghetto Dude from Istanbul, Turkey writes: Good news. I suggest

    1 they include Ford too. Or someone else will "include" it.

    2 they manufacture less brands. The two have a total of 4 or 5 brand names that sell and tens of brands are suffering losses.

    3 they give an end to UAW Kingdom's rule. Is an explanation needed?

    4 they stop acquiring Saab or Volvo sort of additional extraterrestrial brands that always end up with losses. They are both expensive and cheap-looking cars now!

    5 they understand standards are not options. My dinosaur 1995 BMW 5.20 I recently sold did not have one single problem and came with lots of more standards included in the price than a 2009 Mustang comes. Who can see ABS as an optional feature today given the car is not the cheapest model? At least Mustang can.

    6 they re-price their stocks with an intention of selling, not having fun. Believe it or not, 2008 and 2009 Shelby or Mustangs are displayed in Ford's website with exactly the same price tags. Is there a mistake? "The amount of the Lease Cash is appled towards the lease as a downpayment" is a sentence copied and pasted from Ford Canada's official website. "If to apple means to apply, 24.799 may mean 18.799 as well which should be the correct form," I thought.

    7 they learn to manufacture smaller engines too, instead of buying them from other car companies.

    If none of the above, then go to chapter 11.

  37. Jake ---- from Canada writes: The US has to put a stop to these mergers, The only reason these companies are doing this is so when it comes time for a government handout they will be able to argue they are to big to fail. Thats why you have seen all these bank mergers over the last three weeks, the US government should be breaking these companines apart not allow them to get bigger.
  38. g k from Canada writes: I thought it was against U.S. law for these two U.S. companies to merge. I believe that the present Public Policy/Trade Tariff laws would have to be changed to allow such a combination.

    Anyone have clarification on this?
  39. John Hidden from Puntarenas, Costa Rica writes: IMHO, GM is nearly gone anyway.

    At us$1.00 the shares will get delisted from NYSE and that would be the end of it.

    Who in their right mind would by a yellow sheet car company.

    Sorry for the employees and pensionners but the writing has been on the walls since the early '80
  40. Dan Gallie Bitts from Canada writes: I think the big execs at Toyota may dip into their petty cash account and buy GM...
  41. Any Guy At Home from Canada writes: Great - if GM and Chrysler merge we will have a bigger company that makes crappy cars! Lots of room now for more $50K/year janitors. Everyone gets a raise!

    I laughed out loud at the Toyota petty cash comment - too funny - but real.

    How is it Toyota can make $8Bn and GM lose $8Bn during the same time period?
  42. Nick Belton from o.s., Canada writes: Dear GM:
    The only company that has worse customer service than you is Bell. Start listening to the people that buy your product. We are tired of parts bin cars and useless gimmicks (driver info center, plastic coverings on the engines, Motion magazine to name a few).
    If you build it they will come (a good product, that is). Stop letting your accountants run the show and give power back to the engineers.
    Drop some cars! Jack of all trades masters none!
    Contrary to what all of us sheeple have been told, flexfuel and ethanol blends are a waste of time and effort. Develop the electric car!
  43. The Religious Left from Canada writes:
    Chrysler doesn't have the size to be able to absorb the cost of developing hybrids. Simple as that
  44. Working Commercial but Active from Canada writes: Why not? Both pay outrageous salaries & bonuses to incompetant executives that have their boards of directors firmly in their pocket, to the detriment of any shareholder ... looks like a good match.
  45. Peter Stern from Toronto, Canada writes: If that merger goes through, I predict it will benefit Ford in the short term because Ford's two direct competitors would be focused on the merger rather than building and making money on cars. Personally I don't think that it makes that much sense. There would be some benefits though... GM gets a good RWD car platform. Chrysler gets some good FWD cars. GM gets access to Jeep... which could be merged with Hummer (Hummer/AM General was originally a military version of the Jeep developed by AMC). But the downsides would be there would be a ton of product overlap in many areas... pickup trucks, small and mid-size cars, engines, transmissions and other areas. And there would be too many brands too. The Jeep, Chevrolet and Cadillac names would survive. But all the other brands would be redundant to various extents.
  46. Digital Taco from Canada writes: Survival of the fittest. I hope the US or CDN government doesn't bail out GM.

    Every non-US country that is making cars is weathering the storn (ie. Germany, Italy, Japan, Korea). Even India and China's fledgling car industry is expanding and profitable.

    It's a lost cause for GM and Chrysler. Please make it a quick and painless death as opposed to a long, agonizing money-begging death rattle.
  47. Two Sense from Saskatoon, Canada writes: Bankrupts of a feather go down in flames together. Poor management, poor planning, and poor quality. I have not had to replace even one part on my four year old Civic, just oil changes. On the other hand, there is my five year old GM vehicle ... . Never again! Good bye, GM and Chrysler. Hello, Honda and Toyota.
  48. Pelotas Piquen from Canada writes: Recently some automotive expert in talking about GM's problems suggested that they spin off or dissolve all their extraneous brands except Chevrolet and Cadillac. There are just too many similar vehicles competing amongst themselves, but all under the GM umbrella.
  49. APP * from Canada writes: Peter Stern from Toronto, Canada writes: If that merger goes through, I predict it will benefit Ford in the short term because Ford's two direct competitors would be focused on the merger rather than building and making money on cars.
    ----------------------------------------------------------------------------------------

    Sorry, Pete. If anything it will do the opposite. The Globe has not yet reported that Ford is dumping Mazda....they probably will later today. Ford will have to follow suit on a merger as well. In Detroit, the car culture is monkey see, monkey do. Recall, that GM, Ford and Chrysler use the same supplier base and a merger between GM and Chrysler will result in a lot of shifting of the supplier side. If a supplier has a large amount of work with either GM or Chrysler and a smaller amount with Ford and they suddenly lost their customer business it would affect Ford directly as well. Things are not all that jolly in Dearborn right now.
  50. The Grill from Canada writes: So what happens if a car company goes Bankrupt and you still owe them money on a loan? Do you just keep the car?
  51. APP * from Canada writes: Pelotas, there is some truth to that. GM has too many brands and too much product duplication. Problem being, to eliminate a brand or brands cost billions through closing of dealerships, assembly plants, marketing costs etc. That's why they've been balking so far. What you really see is the Toyotafication of Detroit and particular GM. Toyota has a global presence equal to GM yet design, produces and sells half the number of vehicle name plates GM does. That's how they build brand value. GM knows this but the corporate inertia inside the RenCen is very hard to overcome. Then again, they may have done it to themselves permanently this time.
  52. Ghetto Dude from Istanbul, Turkey writes: The Grill, what happens is that, you keep paying your debt whereas GM will not pay its.
  53. JD Would from Calgary, Canada writes: Privatize profits, socialize losses.
    --
    Other posters have nailed it. The 2 companies are going to merge not because of products, markets, economies of scale, or efficiencies,...things that usually drive business decisions.
    --
    The 2 are going to merge because it will be easier to leverage the US and Canadian governments for bailout taxpayer money.
    --
    A huge company like GM/Mopar is too big to fail, they will tell the governments.
    ---
    Maybe the new USSRs Putin can bail them out, like he is bailing out Iceland, or maybe China can buy GM/Mopar out via Buick.
    --
    My extended family always bought Fords, Mercurys, Buicks and Pontiacs. We bought a VW Rabbit in 1979 gas crises, and it was a piece of junk. Too bad, the US auto industry is going the way of British Leyland.
  54. Sweeney Todd from Oilberta, Canada writes: The Religious Left from Canada writes:
    Chrysler doesn't have the size to be able to absorb the cost of developing hybrids. Simple as that

    ===========================================

    Given the state of the US economy, I wouldn't expect to see ANY company to sink money into R&D for things like hybrids. Certainly not any the Detroit 3. Not many people are going to rush out and buy a big-ticket item like a new car these days.
  55. Dick Garneau from Canada writes: Maybe one solution is for all General Motors union members to take a 50% reduction in wages for a equity interest to pay for re-tooling?
    .
  56. Kim Morton from Canada writes: I guess that just making a vehicle that works and does not rust out is too much to ask from detroit.
  57. Sweeney Todd from Oilberta, Canada writes: Dick Garneau from Canada writes: Maybe one solution is for all General Motors union members to take a 50% reduction in wages for a equity interest to pay for re-tooling?

    ===========================================

    Wages & benefits account for less than 10% of the cost of a car. And it's pretty much the same for non-union operations in Canada, like Toyota.

    Everybody from the CEO on down could work for nothing, and it wouldn't shave much of the price of a new car. And if the bulk of your customers either won't spend money they have, because they're worried about their jobs & the economy, or can't get approved for credit to buy a new vehicle, then it's a moot point anyway.
  58. Steve Church from Canada writes: JD, China won't buy out GM due to concerns about quality. Dick G, wage reductions might turn into price advantages but it won't put a dent in the impression that GM products come with extra risk of lemon-smell. The real answer might not be a merger with GM but the breakup of both companies into half a dozen independent companies - fold, bought, grow on their own, specialize. It might be better than looking like another two boat anchors for the Titanic.
  59. Sweeney Todd from Oilberta, Canada writes: Steve Church from Canada writes: "JD, China won't buy out GM due to concerns about quality."

    ===========================================

    The CHINESE have concerns about QUALITY? I'm sorry, but I have to call BS on that.
  60. L. W. from Greener Pastures, Canada writes: I can't believe how many of the posters here are living in the past. GM is currently making some of the best cars on the market, and all you can do is talk about what they did in the seventies and eighties. Kim somebody mentioned how the cars rust out. I work in a body shop. Toyota is one of the worst on the road currently for rust, and Honda, not too far behind. This is 2008 folks. Get with the times.
  61. Just A Canuck from Canada writes: Ha this is rich! GM and Chrysler. Two lemons simply do not make a peach. But if they do merge then at least there will be one less lemon.
  62. GRAEME BLAIR from Canada writes: Bought a GM truck in 2000 and it's been the best vehicle ever. I'll probably buy a Genrysler if it happens.
  63. GRAEME BLAIR from Canada writes: Oh, and by the way, almost 9 years later, never had it rust proofed and there's a spot on the cab corner. i've seen 3 year old Toyota's in worse shape.
  64. Voice of Reason from Ottawa, Canada writes: In my opinion it would be a good thing that the big three merged. Have you seen the cars that come out of these plants...it is like they are cookie cuttered. If you are going to copy, merge and use your resources efficiently to go after the Hondas of the world. They have been too complacient and egoistic in the past.
  65. Pete Mitchell from Canada writes: Jonathan T from Canada writes: I don't see how this will save them.

    I bet this is how it goes. They get into talks this weekend. Next week on the stock market people are expecting a merger. Then the merger talks fall apart. Then everyone loses hope, credit is pulled from the company, and we here at the end of the week that 400 billion in debt and 400,000 jobs are let go. Credit freezes to all companies. Ford goes under. 200 billion more in debt is defaulted on, stock markets reach near zero. All their suppliers file for bankruptcy. Then every steel and half of the plastics companies in the world goes under. Then the mines shut down and demand for oil drops to $10 a barrel. Tar sand operations seize. Another 1 million jobs let go. Then another million. Home prices sink to a quarter of their previous worth. Foreclosures skyrocket. Banks in Canada are nationalized. US Treasury files for bankrupcty. China demands repayment of debt and demands US national assets such as oil and mines. US citizens outraged. War is sparked. WW3.

    *** Great comments... I can definitely see all of the Big 3 filing for bankruptcy, and then all of the steel and plastic providers filing for bankruptcy... tonnes of foreclosures. And yes, finally, the Next Depression.
  66. Keith H from Canada writes: If the stupid unions would give up already... well they can whine for every last penny of wages for a little while longer and then they'll be in the unemployment line after they've milked GM/Chrysler to death.
  67. harry carnie from Northern B.C., Canada writes: Well...........golly gee............perhaps if our North American Auto makers concentrated on making an attractive ,quality ,product with good follow up service they would pull out of the slump?

    Over the years Chrysler produced some of the most beautiful cars on the road.......unfortunately the beauty was only "tin deep" They were crap.

    G.M.has manufactured some VERY reliable machines over the years. They also produced poorly finished junk for many years as well.

    Foreign auto makers are no exception, but in many areas they HAVE corrected design and reliability problems .

    As for the "union bashers"that gets a bit tiresome.

    The unions DO have many faults..but the majority of the problems (in business in general) COMES FROM SH*TTY MANAGEMENT.
    This also applies to our whole economy at the present time......GREED AND STUPIDITY!

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