GM/Chrysler Merger?
 

We’re beginning to think that the offices of Chrysler charge by the hour, by the amount of foot traffic it gets. The company seems to be so good at something that it keeps getting traded like ummm… a seasoned veteran of automotive bliss.

The latest scoop is that General Motors is in talks with Cerberus to “trade” Chrysler’s automotive operation for the remaining 49% stake GMAC Cerberus did not buy previously.

Seems that Nardelli’s military style worked wonders in a Home Depot merchant style environment, but did absolutely nothing for the auto industry.

Chrysler had the largest drop in sales in the previous year with 25% of it’s sales disappearing. Cerberus does not make it’s books public, but industry analysts estimate Chrysler lost in the neighbourhood of $1.5-1.7 billion this past year.

The amount is staggering, but is not significant compared to the losses that General Motors have been experiencing as of late.

Chrysler promises new models for 2010 and 2011, but information on upcoming models have been scarce. General Motors has seen it’s stock price erode in the past week or so, with the recent downgrades to near junk status.

It will be interesting to see what happens and what role the federal government plays in all of this, as both Ford and General Motors will most likely run out of operational funding sometime next year.

Could there be another bailout on the way? What part is the $25 billion recently awarded to the auto companies play in all of this?

These are questions that will have to be answered really soon, as J.D. Power has announced that the auto sector will tank in 2009. What a suprise.

In the meantime, enjoy your GM and Ford stock hit all time lows, and thank you for buying American.



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