I’ve been trying to keep track of the situation with the General Motors and Chrysler, both to stay on top of what’s happening and also to see if there’s anything of partuclarly Saaby interest (which there isn’t).
Everyone’s got a story and the most credible ones are apparently telling theirs to Automotive News. In case some of this stuff is subscription only (as AN are sometimes wont to do), here’s the news.
First there’s the forecast concerning what the new entity might look like:
A merger between General Motors and Chrysler LLC would result in the closing of as many as half of Chrysler’s factories and elimination of all but about seven core models, according to a report by consulting firm Grant Thornton LLP.
A deal also could result in a loss of 100,000 to 200,000 jobs at the two automakers, suppliers and other industry stakeholders, said Kimberly Rodriguez, principal of Grant Thornton’s automotive practice.
Rodriguez said she believes negotiators could reach an agreement in principal as soon as Tuesday, Nov. 4, election day. Reuters reported yesterday that GM and Chrysler’s owner, Cerberus Capital Management LP, have resolved major issues and the final form of any accord will depend on financing and U.S. government support.
That’s a lot of cut models and a heck of a lot of jobs. But of course, it all depends on the government financing.
Right now, it looks like the whole deal might be off before it even starts:
The U.S. Treasury Department is not negotiating with General Motors and the owners of Chrysler LLC on a request to provide direct government aid to their proposed merger, a Bush administration official said today.
Instead, the administration is working to speed the distribution to automakers of $25 billion in factory retooling funds authorized by Congress last month, the official told Reuters.
Earlier this week, industry sources said GM had asked for roughly $10 billion in an unprecedented government rescue package to support its acquisition of Chrysler from Cerberus Capital Management LP.
The request was viewed as over and above the $25 billion in funds to enable the automakers to produce fuel-efficient vehicles.
“Treasury is not negotiating with the automakers, the administration is working to get the $25 billion Congress already authorized to the industry,” the official said.
A GM spokesman had no immediate comment.
The general consensus is that President Bush would rather have this file lodged in the Obama/McCain presidential library instead of his own. It’s not dead in the water yet. Word is that the parties have sorted out a lot of the stuff that needs to be negotiated. What’s left is this funding issue, which might have to wait until after the election.
You are now up to date.