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The discussions come at a difficult time for the automakers, who are facing a sales slowdown at a time when they are bleeding cash trying to revamp their lineups around smaller, more fuel efficient vehicles. Investor doubts have driven shares of both General Motors and Ford Motor Co. to historic lows, and have prompted both companies in recent days to deny they are considering seeking bankruptcy protection. It is unclear how interested GM is in a transaction. A deal would give General Motors additional U.S. market share and ownership of the still-popular Jeep and Dodge brands owned by Chrysler, but would also create potential labor integration headaches and regulatory oversight that could distract it from its turnaround efforts. GM, which is looking to raise upwards of $15 billion in fresh cash by the end of 2009, could seek an equity investment from Cerberus as part of a deal to give it a stronger cash cushion. While the reports are unclear, it appears the talks have been initiated by Cerberus. When the private equity giant first got involved in the auto industry many insiders had hoped it would bring fresh ideas to a business in desperate need of them, but Chrysler has floundered as the economy soured. The Times report said that if a deal with GM can not be arranged Cerberus might turn its attention to Nissan-Renault, an indication that the private equity firm has thrown up the white flag and is ready to move on. - Lou Whiteman See story from THe New York Times Lou Whiteman is a senior writer for The Deal covering the automotive and airline sectors. CategoriesComments
From: Robert Barr,
It's about time! Everything these guys (Cerberus) have been doing for the last six months has been to dump this company. It is a real shame Cerberus pussy footed around making this company a success. Now maybe Chrysler can get a new lease on life...who am I kidding, GM is going to buy them!
Posted on:
October 11, 2008 9:50 PM
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Cerberus Capital Management LP appears ready to abandon its disastrous foray into the auto business barely a year after jumping in, reportedly holding talks to potentially merge its Chrysler LLC unit with General Motors Corp. The talks began more than a month ago, 
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bad deal for chrysler