General Motors Merger Talks?

Right now, General Motors is in possible merger talks with Chrysler after first approaching Ford. Ford dismissed the idea of a merger, but Chrysler seems to be somewhat interested. This is not to say that all of this talk is nothing more than just that, all talk. But, with all three of the US auto manufacturers hurting for sales, one must wonder.

GM’s problem, and possibly the whole reason they are searching for a partner, is GMAC. What is GMAC? GMAC Financial Services is a diversified, global financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and commercial finance businesses. With so many financial service companies in turmoil, it is no wonder that these talks could ultimately lead to a merger.

So, who could be leading these talks? Cerberus Capital Management, L.P. Who is that? They invest primarily in companies which are near bankruptcy. Cerberus owns around 80% of Chrysler, and 51% of GMAC when GM sold it to them on November 30, 2006. Owning the majority of both GM and Chrysler, it only makes sense that they would want to merge the two to maintain their investment return opportunity.

While all of this is still just talk, it certainly looms in the back of millions of those minds who are employed by either of these two auto giants. These employees need to be reassured, and only for one simple fact. The CEO’s are acting in the best interest of the employees and the companies, and NOT letting the government step in and socialize the auto industry.

2 Responses to General Motors Merger Talks?

  1. Interesting development. The landscape we once knew as far as corporations and financial institutions is changing right before our eyes. We are living through history, the only problem is what kind of history will it be defined as.

  2. Daniel,

    I have and offer about doing some contributing writing to a new website I am launching for a group of Conservative bloggers here on blogspot. The site is called Conservative Badlands, call it an experiment in free speech. I have emailed out offers to other bloggers. But I wanted to give yo first crack at it putting up some stuff on it. What we talked about on the forum kind of got me thinking. If you are interested email me at criticalthinker133@yahoo.com and I will send you the specifics. Take care and thanks for linking the forum. Here is the link if you want to check out the site and what I have so far it is
    http://conservativebadlands.blogspot.com/

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