GM - Chrysler merger ?

[ivan1]

From Automotive News:

General Motors, battling shrinking U.S. sales and a plummeting stock price, is discussing a possible combination with Chrysler LLC, a person familiar with the talks said.

A deal would make sense, but there's no certainty the two companies will be able to make it happen, said the person, who didn't want to be identified because the talks are private.

The discussions add to the prospect of Chrysler falling under different ownership, 14 months after the third-largest U.S. automaker was sold to private-equity firm Cerberus Capital Management LP. GM explored buying its smaller U.S. rival in early 2007, before the former DaimlerChrysler AG announced the sale to Cerberus.

Chrysler's U.S. sales have plunged 25 percent this year, the steepest decline of any major auto company. GM's volume has dropped 18 percent as U.S. demand for new vehicles slides to the lowest levels since the early 1990s.

The Detroit-based automaker hasn't posted an annual profit since 2004, and its recovery efforts have been hampered by the global credit crisis. GM's stock price fell to its lowest point in more than a half century this week, closing at $4.89 yesterday.

"Without referencing this specific rumor, as we've often said, GM officials regularly have conversations with other automakers about items of mutual benefit," said GM spokesman Tony Cervone. He declined further comment.

In a prepared statement, Chrysler's communications director, Lori McTavish, said the automaker "as a matter of policy does not confirm or disclose the nature of its private business meetings." She said the company is exploring several "potential global partnerships."

"Beyond those partnerships already announced however, Chrysler has not formed any new agreements and has no further announcements to make at this time," she said.

A Chinese automaker and Renault-Nissan may also be interested in Chrysler, CEO Bob Nardelli said in an interview last week. He said any decision to sell Chrysler would be up to Cerberus.

The private-equity firm owns 80.1 percent of Chrysler and recently offered to buy the remaining 19.9 percent from Daimler AG, spurring speculation Cerberus may be trying to sell the company.

Nardelli said his job is to execute Chrysler's recovery plan. He said he has

met Carlos Ghosn, CEO of France's Renault SA and its Japanese Nissan Motor Co. affiliate, several times.

"Carlos could be a strategic buyer if anything you read in the paper is true about Renault wanting to get access to the U.S. market," Nardelli said. "China could be a very strategic buyer for a totally different reason.

"It depends on who has a hoard of cash in this economy because they're not going to get a lot of debt out there," he said.

Cerberus spokesman Tim Price recently told the Financial Times that Chrysler isn't for sale.

In Tokyo, Nissan spokesman Simon Sproule said Renault-Nissan continues to talk about additional joint projects with Chrysler. "Anything beyond that is speculation," Sproule said. "I'd just characterize it as background noise."

The New York Times late yesterday cited people close to the talks saying that chances are 50-50 that the negotiations will lead to a GM-Chrysler merger.

The Wall Street Journal said Cerberus offered to sell Chrysler to GM in return for GM selling its remaining 49 percent stake in GMAC LLC to Cerberus. GM sold a majority of the finance arm to Cerberus in 2006.

[ivan1]

In a related story......

TOKYO -- Ford Motor Co. may sell part of its stake in Mazda Motor Corp. to help weather plunging U.S. auto sales and the global credit crunch, Japanese media reported.

Ford is close to selling most of its 33.4 percent holding in the Japanese carmaker, the Nikkei newspaper and broadcaster NHK said today. NHK said Ford wanted to shed a 20 percent block.

Ford and Mazda declined comment on any specifics. "Our relationship with Mazda has not changed," said Ford spokesman Mark Truby. Mazda in a statement said: "Nothing has been decided."

Proceeds of any sell-off could help stabilize Ford's financial situation, weakened by falling sales and a tumbling stock price. Standard & Poor's said this week it was considering cutting Ford's credit rating deeper into junk status.

Japanese trading company Sumitomo Corp. and India's Tata Motors were potential buyers of Mazda shares, Nikkei said. Ford sold its Jaguar and Land Rover units to Tata earlier this year.

Ford and Mazda would continue joint auto production following any sale, the Nikkei said.

Ford CEO Alan Mulally told Reuters yesterday that a bankruptcy filing "makes no sense to us." He said the automaker is focused on its turnaround and managing its cash "very, very carefully."

Said Mulally: "Clearly the most important thing for us is to continue to build our viable Ford."

[ivan1]

More relevant to Lotus fans:

KUALA LUMPUR: Proton Holdings Bhd says the time is right for it to strike a strategic relationship with a foreign partner.

The company, which has seen its results rebound after its balance sheet was cleaned up and product line-up refreshed, is continuing to rationalise its operations while eagerly awaiting the impact of the upcoming MPV to its performance.

“Today we are discussing with our shareholders the options available for Proton. Going forward, there will be room for strategic collaboration,’’ managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir told reporters in Bangkok last week after launching the Proton Persona for the Thai market.

Syed Zainal, who said car companies had indicated their interest in partnering Proton, said the prerequisites for a partner remained the same; one that could add to its technology, product platforms, improve its efficiency and one that would complement its existing markets rather than compete directly against it.

The turmoil afflicting car majors globally would also give Proton a leg up in any discussion, Syed Zainal said.

“It puts us in a position to give them a much better value. We have the capacity and platforms and we have a value to contribute and they can tap our lower cost of production,’’ he said.

Notwithstanding the new strategic partner, Proton is negotiating with other manufacturers on a product partnership for the Waja and Perdana replacement models. The Waja replacement should be out by early 2010.

In the meantime, work continues on a number of fronts for Proton. The company is going to make a decision on a replacement powertrain for the Campro, which is scheduled to be introduced by around 2014 and preferably in a collaboration with another car company, and is evaluating and testing hybrid and electric car technology.

Talks are also ongoing for Proton to secure a diesel engine from either PSA Peugeot or Fiat and there is a need for Proton to secure a small capacity engine.

Syed Zainal said the company’s first-quarter (ended June 30) profit of RM52mil was a function of many factors coming together at the right time. Sales of the new Persona and Saga have revitalised Proton and Syed Zainal said its staff were ebullient over the overall progress of the company.

“When volume is fulfilled, confidence is there and, from a financial point of view, people are getting much better throughput. People are able to invest in their facilities and training and that gives us cost efficiencies.

“Quality also improves and vendors are also smiling again. Now they have money to invest,’’ he said.

But still more needs to be done. Consolidation of dealer network is ongoing and, although the number now stands at slightly less than 300, he feels the right size is 200 outlets, which will allow them to invest more in their business as the throughput in terms of sales increases.

Commonisation of parts and overall improvement in efficiency and cost control through bulk buying of raw materials has seen the cost to build the Persona, the Saga and the upcoming MPV come in under budget by 10%.


The better financial standing has also allowed Proton to tackle the global uncertainty from a much stronger position but it is still cautious about its impact on sales.

“We believe the worst (financially) is already over. I think the question today is sustaining that in terms of continuous improvement of product, the eco-system both upstream and downstream and the company exercising prudent cost management,’’ he said.

While keeping an eye on the global financial crisis, Proton feels that it has escaped the first wave since it does not sell cars to the United States.

Syed Zainal feels the spillover into other markets may hurt Proton but, closer to home, the worry is how financial institutions will react to giving out fresh car loans.


Lotus was getting closer to turning around, Syed Zainal said, adding that its cost base had been reduced and Proton and Lotus could work more closely from a product and engineering perspective.

[lotusforsale]

Mmmm...are we looking at a future Corviper, or maybe a Vipette? A Cobaliber? A Malibring?

A Cadillac 300M?

[...m...]

Originally Posted by lotusforsale

Mmmm...are we looking at a future Corviper, or maybe a Vipette? A Cobaliber? A Malibring? A Cadillac 300M?

...maybe a cobaliber or malibring, but no viper lineage, since chrysler's selling off the model...

[lotusforsale]

Originally Posted by ...m...

...maybe a cobaliber or malibring, but no viper lineage, since chrysler's selling off the model...

Well, if they sell Viper to whomever GM is selling Hummer, maybe we'll see a Humper?

That's my own humor.

[Linfone]

Yea, Hummer SRT-10. Awesome.

[Lotus Fury]

Originally Posted by lotusforsale

Well, if they sell Viper to whomever GM is selling Hummer, maybe we'll see a Humper?

That's my own humor.

That was awesome.

As for this merger - two wrongs don't make a profit.