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GM, Chrysler Merger Talks on Hold: Report

TSC Staff

A potential merger of General Motors (GM Quote) and Chrysler has hit an impasse after the Bush administration ruled out funding for a deal, according to a published report.

This puts any merger of the struggling automakers on hold until after the U.S. presidential election, Reuters reports, citing sources with direct knowledge of the talks.

The development opens the door for Cerberus, Chrysler's owner, to restart talks with the Nissan-Renault alliance. Cerberus has seen a deal with the joint venture of Nissan(NSANY Quote) and Renault as an option outside of a GM acquisition of Chrysler.

GM had approached the Treasury Department in recent days about support for the merger through roughly $10 billion in funding that would have included taking an ownership stake in the merged company, Reuters reports. But a Bush administration official said Thursday the Treasury Department wasn't negotiating direct aid for the merger.