Talks between General Motors and DaimlerChrysler about the future of the Chrysler Group are serious and have been going on for two months, according to the Detroit News. GM has been in discussions with DCX about acquiring all of the American arm and folding it into the greater GM.

The high-level talks started back in December, with GM Chairman Rick Wagoner and DaimlerChrysler CEO Dieter Zetsche meeting in Detroit to discuss the sale of Chrysler. While talks are still at a high-level, there have been at least four meetings between Wagoner, Zetsche, and CFOs from both companies. Discussions are said to be continuing, primarily between the CFOs. As usual, both companies declined to comment.

If GM purchased Chrysler, it would no longer exist as a unique company or a subsidiary. Instead all of its brands and factories would become part of the larger GM organization.

Auto industry experts say a deal would be extremely risky for GM, which is in the middle of its own turnaround. Analysts believe GM already has too many brands, and too much cannibalization of its products, adding three more would just make it worse. If GM’s cutting of more than 30,000 jobs and Chrysler’s recent announcement of 13,000 job cuts are painful, the combination of GM and Chrysler would result in even more cuts — massive cuts. And how is the UAW going to react to that.

## Source: Detroit News ##

Posted in: Chrysler, DaimlerChrysler, GM, Business, News, Industry, Financial
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