GM, DCX talks serious
"Given the transformation the U.S. industry is beginning, we would not rule out a tie-up," Murphy, who is based in New York, said in a note to investors today. "GM may view the acquisition as a defensive maneuver to box out new competition."
GM and DaimlerChrysler are discussing options including a sale of the unprofitable Chrysler division, people with knowledge of the talks said Feb. 16. DaimlerChrysler said on Feb. 14 it was exploring "all options" for the Auburn Hills-based unit after Chrysler posted a $1.5 billion loss for last year.
Buying Chrysler might give Detroit-based GM more leverage with the United Auto Workers union and truck-manufacturing technology that could be used in common, Murphy said. He rates GM shares a "buy" and doesn't have a recommendation for Stuttgart, Germany-based DaimlerChrysler. Detroit News
02/19/07 General Motors Corp. has been in talks for two months with DaimlerChrysler AG about acquiring all of the troubled Chrysler Group and folding its operations into GM, according to people familiar with the discussions.
The first contact occurred in December, when GM Chairman Rick Wagoner and DaimlerChrysler Chief Executive Dieter Zetsche met in Detroit to discuss the blockbuster idea of GM buying Chrysler from its German parent company.
While a deal is far from certain, at least four meetings have taken place involving Wagoner and GM's chief financial officer, Fritz Henderson, and Zetsche and DaimlerChrysler's CFO Bodo Uebber. Talks are said to be ongoing, primarily between Henderson and Uebber.
Both companies declined comment Sunday.
The underlying rationale for the deal is the need for major consolidation in the intensely competitive American auto industry, said people with knowledge of the talks.
GM, the No. 1 U.S. automaker, is said to be interested in absorbing Chrysler's revenue, production volume and brands, while cutting duplicative labor costs, management and overhead.
DaimlerChrysler, for its part, is intent on dissolving the 1998 merger that brought together the former Daimler-Benz AG and Chrysler Corp.
A GM acquisition of Chrysler would essentially reduce the Big Three to a Big Two, with only GM and Ford Motor Co. surviving from the dozens of American automakers that once existed in the 20th century. More at Detroit News