Chrysler in Preliminary Merger Talks with GM

According to separate reports in The New York Times and The Wall Street Journal, two of the most iconic and troubled.... names in the American industry, General Motors and Chrysler LLC, have been in preliminary talks the past month or so concerning a possible merger. It is also reported that Cerberus Capital Management, the private equity firm that owns Chrysler LLC is also holding talks with other automakers including the Renault - Nissan Group.

Citing unnamed sources close to the process, the New York Times said that the chances of a merger between the General and Chrysler LLC were “50-50” as of Friday and would most likely still take weeks to work out. Officially, GM declined to comment on any specific talks with Chrysler. “Without referencing this specific rumor, as we’ve often said G.M. officials routinely discuss issues of mutual interest with other automakers,” told NYT GM's spokesman, Tony Cervone. -Continued

On Chrysler LLC's behalf, behalf, Lori McTavish, Executive Director, Communications, Chrysler LLC said: "Chrysler LLC as a matter of policy does not confirm or disclose the nature of its private business meetings. As we have said, the Company is looking at a number of potential global partnerships as it explores growth opportunities around the world. Beyond those partnerships already announced however, Chrysler has not formed any new agreements and has no further announcements to make at this time."

It is apparent that the two American giants have indeed explored the possibility of a merger, but that shouldn't surprise anyone. However, from an automotive prospective and aside from the brisk bragging rights for forming the largest automaker in the world (GM sold 9.4 million vehicles in 2007, Chrysler 2.7 million) we just can't figure how this merger could possibly benefit two problematic companies with a near identical product portfolio.

Links: NYT & WSJ