GM-Chrysler Merger Talks Exaggerated by Media

In the tricky waters of merger negotiation coverage, what a difference three days makes.

When the news -- if you'll call it that -- broke on Friday, General Motors(GM Quote) and Chrysler were in "preliminary talks" about a "possible merger." Negotiations were "not certain to produce a deal." Almost everything written about the chatter between GM and Chrysler in The New York Times story that brought the merger talk -- if you'll call it that -- to public light, was appropriately measured and clearly speculative.

Big, desperate companies are always flailing about at ways to save themselves or just buying time with shareholders by appearing to take steps in that direction. As we've seen in troubled industries such as the airlines, everyone talks all the time. So as not to lead savvy investors on, the coverage of talk between two troubled sides has to be portrayed with the proverbial grain of salt. And that's just what the Times did, at least the first time around. The passage of a day or two is never kind to proverbial grains of salt, though, as we'll see.

On Friday, in the story that brought the talk to light, the Times' headline -- "G.M. and Chrysler Explore Merger" --used the right verb: "explore." After all, that's all the two companies were doing.

The lead continued the thread of responsibility with all those words like "preliminary," "possible" and "not certain" that give you, the savvy investor, the accurate sense of where such talks from such outfits in such times probably stand:

"General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.