Chrysler and General Motors Begin Merger Discussions

Talks to create the world’s largest automaker have begun in earnest in what is described as a “50:50 possible” merger between General Motors and Chrysler, represented by its parent company Cerberus Capital Management. Said talks have been going on for about a month and the plan would be to create one company from General Motors and Chrysler, which would then be bigger than Toyota and form what could be one of two US giants alongside Ford.

Times have certainly changed in the past year or so when sales of SUVs, the mainstay of American automakers’ profits, have plummeted to such an extent that once-iconic brands like HUMMER are up for sale. GM itself has seen its share price free-fall from about $43 USD per share a year ago to about $5 USD per share today. The company has about $21 billion in cash, but burns through that at a rate of about $1 billion a month. No one from either camp is confirming of denying these talks, but we do know that peripheral talks are going on between Chrysler and Renault/Nissan as well. So where does all this leave Ford?