Sunday, October 12, 2008
GM, Chrysler in talks, Ford eyes Mazda: reports
DETROIT (Reuters) - General Motors (GM.N: Quote) has had talks with smaller rival Chrysler LLC about a merger that would combine the No. 1 and No. 3 American automakers at a time when both are struggling to cut costs and shore up cash, according to published reports on Friday.
Separately, Japan's NHK reported that Detroit's other automaker, Ford Motor Co (F.N: Quote), plans to sell most of its controlling stake in Japan's Mazda Motor Co (7261.T: Quote).
The reported moves come as all three Detroit-based automakers are struggling with a plunge in U.S. sales to 15-year lows and facing tough questions from investors and creditors about whether they have the cash to ride out a deepening downturn.
Representatives of GM, Chrysler and Cerberus Capital Management, the private equity firm that owns a controlling stake in Chrysler, were not immediately available for comment.
Ford representatives could also not be immediately reached.
The New York Times reported that GM and Chrysler's private owners have had preliminary talks about a possible merger.
The talks between GM and Cerberus began more than a month ago and are not certain to produce a deal, the newspaper said.
The Wall Street Journal also reported that GM and Cerberus had conducted merger talks, but said those had been suspended because of financial market turmoil.
The newspaper said that Cerberus had proposed a swap of assets with GM that would give the private equity firm full ownership of finance company GMAC.