G.M. and Chrysler Explore Merger

[mtema99]

As the potential merger between General Motors and Chrysler becomes clearer in detail, it is beginning to look less and less likely due to problems with the financing necessary for GM to complete the deal. Government aid could bridge the gap, but so far nothing along those lines has been proposed.

Executives at GM are confident they can acquire what it wants of Chrysler and improve its own position, but outsiders think such a result neglects the financial realities of the purchase, reports Autmotive News. Acquiring Chrysler would cost GM a great deal of cash - something it does not have an abundance of at the moment, despite a large quantity on the books. Financing the purchase is likewise not a strong option given the current status of the United States' major lending institutions and GM's own credit risk rating.

Chrysler is also carrying $9 billion in debt that would need to be either paid off or refinanced upon acquisition, further complicating matters for the merger. GM had nearly $21 billion in cash at the middle of the year, but was using about $1 billion per month at the time, and likely even more now as the market continues to slide. It must still generate another $4-5 billion in cash to pay off 30,000 to 40,000 union jobs that could be cut in a merger between the two companies if the deal does move forward.

Government funding for the merger, if made available, could potentially salvage the deal and stave off some of the massive layoffs that would otherwise be necessary. Excess capacity for a combined and presumably streamlined operation would still necessitate some layoffs, but if the merged company wasn't forced to deal with raising billions in cash through cost-cutting, it might be able to hold on to more of the workers currently employed by both companies.

GM does have the possibility of trading its remaining stake - 49% - in GMAC to Cerberus, owner of Chrysler, for all or part of its 81% share in the company, but that, too is fraught with debt and other difficulties. Nevertheless, the parties are charging forward, with a possible announcement within two weeks time.

[mtema99]

على العموم هنشوف الموضوع هيرسي على ايه

[mtema99]

في اطار مساعي كريسلر لترتيب الاوراق و جلب حفنه اخرى من الاموال

لبدء مرحله شرائها الكامل من قبل الجنرال كما يطلقون عليه General Motors

اوقفت كريسلر التطوير على الجيل الجديد من محركات ال في 6

و اليكم الخبر

Chrysler’s future Phoenix V6 engine has been speculated on for the past several years and now as the company is the midst of merger talks there are claims that the $3 billion engine project may have been shelved.

The Phoenix V6 was touted to be a world class engine designed for Chrysler’s entire portfolio of brands, including its Jeep SUVs, Chrysler sedans and minivans, and Dodge pickup trucks. Some of its planned features included direct-injection and cylinder-deactivation technologies as well as variable valve timing.

While Chrysler is yet to confirm if development of the Phoenix has been canceled, Allpar reports that one of the plans that was scheduled to build the engine has been told the project has been canned. The latest rumor comes less than a week after Chrysler dropped plans to build a new dual-clutch transmission with Getrag.

If the claims prove true, their close proximity with reports of a possible merger between Chrysler and General Motors or Renault-Nissan suggests that a deal will go ahead sometime in the near future. Both GM and Renault-Nissan build some of the most modern and high-tech V6 engines in the industry – GM with its HF (high feature) V6 and Renault-Nissan with the award-winning VQ series.

Chrysler canceling its own development plans makes sense as the Phoenix project was previously reported to have a bill of around $3 billion.

و في خطوه اخرى على صعيد اخر

اعلنت jp- morgan انها ستدخل في عمليه الاندماج بين كريسلر و بين جنرال موتورز


A group of banks led by mega bank JPMorgan Chase have joined the discussions between General Motors and Cerberus Capital Management over the sale of Chrysler LLC. JPMorgan Chase holds about $10 billion in Chrysler debt and is apparently eager to help General Motors acquire the beleaguered, privately-held automaker.

“While a GM-Chrysler tie-up would clearly be a high risk transaction from an operational perspective, such a transaction may give GM leverage over two key stakeholders: the UAW and banks,” JPMorgan auto industry analyst Himanshu Patel wrote in a research note provided to journalists yesterday. “By saving Chrysler from a liquidity event, GM may also be able to get itself much needed secured bank financing from the same banks that are currently holding Chrysler debt.”

GM would also gain access to Chrysler’s $11 billion in cash, though the combined group would ultimately shed up to 30,000 jobs, according to those close to the discussions. The job cuts would, naturally, be devastating to the Michigan economy, as well as Chrysler employees at plants, dealerships and regional offices throughout the United States.

Ann Arbor, Michigan-based David Cole, chairman of the Center for Automotive Research, said that the GM-Chrysler deal is “90 percent certainty” during an interview with the Detroit News.

“The cost of a cleanup would be a lot of more than preventative measures,” he told the paper. “The banks are pushing hard. They want to see a consolidation. A combined GM-Chrysler becomes too big to fail from a policy standpoint.”

[mtema99]

و في مقال جديد

قال بعض المختصين ان الشركتين تنويان التسريع في عمليه الاندماج

و اليكم المقال

General Motors and Cerberus reportedly want to act as quickly as possible if they are going to make a move on Chrysler. It seems that the two bargainers would like to come to a decision before the upcoming Presidential elections, as they believe they may get more promises from either candidate before the actual vote takes place. A potential problem exists though, as General Motors is finding it tough to come up with the cash needed to make a deal happen and banks aren't about the lend it to them. An alternative option that's being considered is getting government backing for the deal.

Though it sounded hard to believe when we first heard the GM/Chrysler merger rumors, it truly appears that these talks are taking place at a very high level and the deal could indeed be on its way to. We'll just need to pay close attention in the next few weeks to the reactions from the Feds, the UAW and the thousands of workers that would inevitably be affected by the deal. Stay tuned.

[islam_galal]

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