Reports: GM in talks to buy Chrysler Group

Reports: GM in talks to buy Chrysler Group
http://money.cnn.com/2007/02/16/news/companies/chrysler_gm/index.htm?cnn=yes

NEW YORK (CNNMoney.com) -- General Motors is in talks to buy DaimlerChrysler
AG's struggling Chrysler group in its entirety, according to several
reports.

According to the reports, sources in Germany and the United States said
high-level talks between GM (up $0.16 to $36.60, Charts) and DaimlerChrysler
(up $2.50 to $72.75, Charts) executives are taking place.

Chrysler Group announced Wednesday it would be cutting about 13,000 workers
over the next three years as a part of a restructuring plan. Reports also
said its German parent was considering selling or spinning off the unit.

Talks of an alliance between GM and DaimlerChrysler was first reported last
week in Germany's Manager-Magazin.

Chrysler's Valentine's Day massacre
The German publication said DaimlerChrysler Chairman Dieter Zetsche had met
with GM Chairman Rick Wagoner about a possible sale of Chrysler to the
automaker.

Other unnamed sources said to be familiar with the discussions confirmed the
reports for Reuters and the industry newspaper Automotive News.

DaimlerChrysler employed J.P. Morgan Chase & Co. to consider options for the
Chrysler Group, to help the automaker explore strategic options, according
to reports.

But others are also skeptical on whether the discussions are real.

"This would be a at least $5 billion plus deal and GM is not that liquid
right now," John Casesa said, an automotive analyst with Cases Strategic
Advisors LLC. "I'm not convinced at all and I think it's unlikely."

Officials for DaimlerChrysler and GM issued no comments on the reports.

DaimlerChrysler has long tried to reverse the drop in sales with previous
cost-cutting moves but slipped into the No. 4 spot last year behind Toyota
(down $0.37 to $136.40, Charts) in the United States.

Renault Nissan's (down $0.16 to $23.32, Charts) Chief Executive Officer
Carlos Ghosn expressed interest in the past in buying the automaker.

 

You wouldn't think GM could afford to buy anything, but when you consider
Chrysler is only worth $5 Billion, and GM could lose that much in a single
quarter, it doesn't seem so bad.

 

I am having a problem visualizing GM of buying Chrysler. Perhaps it is
only in America that a "sick" company can afford to buy another
company which is in trouble. Is this a result of a civilization living
on credits and borrowed times? My current thinking has been that
people do not buy things if they cannot afford it.
How do you manage to get Chrysler to go back into a healthy company,
if the one that running it is not in a "healthy" condition in the
first place. What's wrong with this logic?

 

The blind (GM) leading the blind (Chrysler) will result in both falling into
a ditch. This is not a good sign.

 

Would Americans be happy because Chrysler would be 'American' again...?...

DAS