Troubled Chrysler in New GM Talks, Closing All Plants

Even as Chrysler announced that it was closing all of its plants at least through mid-January, word comes through that merger talks between the privately held automaker and troubled GM have resumed. Chrysler owner Cerberus Capital Management has signaled its willingness to give away part of its ownership in the automaker, according to the Wall Street Journal, which cited parties close to the situation, and merger talks with GM have restarted.

According to the report, Cerberus took the initiative to restart negotiations, which broke down a few weeks ago amid hope of a massive bailout by the Federal government. Earlier yesterday, Chrysler officials said the company was closing down all of its 30 North American plants “until at least 19 January.” The closings will kick in at the end of the day tomorrow.

In a new report, Moody’s Investor Services Inc. said if the U.S. government failed to intervene and all three automakers were to collapse into bankruptcy, it would lead to an estimated 2.5 million job losses by 2010 in the United States, cost the government there up to $250 billion, and cost the car companies about 20 per cent of their combined marketshare. Even a small bailout plan, such as that rejected by Congress last week, said Moody’s, would not be enough to allow GM or Chrysler to recover long-term. (Tire Review/Akron)