GM Talked Deals With Chrysler, Ford: Reports
Updated from 1:30 p.m. EDT
General Motors
(GM) - Get General Motors Company Report
has been in separate talks about potential mergers with fellow Big Three automakers
Chrysler
and
Ford
(F) - Get Ford Motor Company Report
, according to published media reports.
Citing anonymous sources familiar with the matter, both
The New York Times
and
The Wall Street Journal
reported that GM recently has conducted talks with Cerberus Capital Management, the private equity equity firm that owns Chrysler.
The
Journal
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reported that the talks have become inactive because of the crisis in financial markets but added that if markets stabilize, GM and Cerberus could renew discussions.
The
Times
reported that the talks began more than a month ago and said a possible merger would probably require weeks to conclude.
Cerberus, which owns 51% of auto lender GMAC, has proposed a swap in which GM would get Chrysler's automative operations, while Cerberus would receive the remaining 49% stake in GMAC, the
Journal
reported.
Citing a person familiar with the situation, the
Journal
also reported that in recent months GM approached
about a possible merger. But Ford called off the discussions after it decided it should continue to remain independent, the
Journal
reported. The talks were exploratory and very preliminary in nature, according to an anonymous source quoted by the
Journal
.
American automakers find themselves in an extremely difficult environment.
Car sales
are down as consumers feel the effects of the slowing economy, and as the financial crisis has made it difficult for potential car buyers to get loans. High
fuel prices
have turned consumers away from gas-guzzling sport-utility vehicles, which had long been big sellers for Detroit.
The conditions for GM and Ford have become so grim that both companies were forced to issue statements Friday saying they were not considering filing for bankruptcy.
Shares of GM closed Friday up 13 cents at $4.89. Shares of Ford finished the session down 9 cents at $1.99.
This article was written by a staff member of TheStreet.com.
