GM and Chrysler Await News on Government Loans to Proceed with Merger

Automobile Staff
Gm Chrysler Merger

General Motors and Chrysler owner Cerberus Capital Management have resolved most discussions regarding the proposed merger between the two automakers. Now the deciding factor sits in the hands of the government, as both companies wait to hear what kind of loans the government is willing to offer to provide the necessary cash for the merger to go through.

It's unknown what the major issues that were resolved were, however it is known that the talks between the two companies covered a range of topics including the amount of stake Cerberus would still have in the company and the fate of GM's financing company, GMAC, an issue complicated by the fact that Cerberus already owns 51 percent of GMAC. There is talk that Cerberus might combine it with Chrysler's financing company, Chrysler Financial.

The two automakers have been struggling for years now and the recent economic downturn has lead to this proposed merger. Since news of the merger possibly going through was released, GM's stock price began to rise and the cost to insure the debt of the two automakers started to fall.

Source: Reuters

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