G.M. and Chrysler Explore Merger

[ozpont]

Detroit
    General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.

     The talks between G.M. and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were "50-50" as of Friday and would most likely still take weeks to work out.

    Speculation about a possible bankruptcy filing by G.M. has mounted in recent weeks because of the automaker's dwindling cash reserves. The automaker had $21 billion in cash on hand at the end of the second quarter, but it was burning through more than $1 billion a month.

   The credit rating firm Standard & Poor's put G.M. on negative credit watch on Thursday.

   But G.M. has said it is confident that it can increase its liquidity, and emphasized in a statement released Thursday that it was not considering a bankruptcy filing.


  More details .. in todays New York Times:
http://www.nytimes.com/2008/10/11/business/11auto.html?th&emc=th


THINK ABOUT THIS FOR A SECOND.. both companies are primed to go bankrupt under current circumstances... How does merging help..?  do they stop competing against each other.. do they reduce dealerships, cross train staff.. reduce assembly plants..who do they sell to.. ?? the japs.. or another Healthy US Automaker..??
  .. ie both inplode..??    to then compete against who.. importers with cheaper workforce... .. ??
   Glad I don't have to work this one out.... ;L