UPDATE 2-GM/Chrysler seek $10 bln govt aid for merger - sources

Reuters ^ | 10/27/08 | Jui Chakravorty Das and Kevin Krolicki

[Enchante]

NEW YORK/DETROIT, Oct 27 (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) and Cerberus Capital Management have asked the U.S. government for around $10 billion in an unprecedented rescue package to support a merger between GM and Chrysler LLC, two sources with direct knowledge of the talks said on Monday.

The government funding would include roughly $3 billion in exchange for preferred stock in a merged automaker, according to one of the sources, who was not authorized to discuss the matter publicly.

The U.S. Treasury Department is considering a request for direct aid to facilitate the merger and a decision could come this week, sources familiar with the still-developing government response said earlier on Monday....

[Enchante]

Another bailout?? Create a monster auto company "too big to fail"??? This is grim....

[rabscuttle385]

Big Government at its finest.

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[rabscuttle385]

Late night ping!

[allmost]

If their profitability forecasts are not rising with the Dollar then they made some really big mistakes. I despise this ‘bailout’ crap.

[allmost]

Guessing I posted that to the wrong person, meant #4 to you.

[Tarpon]

Hop aboard the bailout bus. Who is going to stop it now?

The funny thing is auto companies don’t need bailouts, once you just tell the stupid CAFE rules for ‘the little people’ to go away.

I never thought I would live to see the day the U.S. Constitution was just tossed out willingly, by so many of my fellow citizens, in return for free pies.

[Nathan Zachary]

Didn’t GM just get 10 billion or so, so they could sell cars @ 0% interest through GMAC?

Screw them. They’ve taken enough taxpayers money, as well as money from people who buy the overpriced junk they sell

[Jacquerie]

I agree they should be allowed to fail. Its not as if the country will run out of new autos if they went bankrupt.

However, one thing to keep in mind is that rat pols long ago made sure that UAW pensions are guaranteed by Uncle Sugar. I don’t know which would be more expensive, loan bailouts to terminally ill companies or pension payouts.

[wolf78]

Another bailout?? Create a monster auto company "too big to fail"??? This is grim....

Couldn't agree more. Also: From the car side of the equation there is no reason for those two to merge, both lineups complement each other not one bit. This is a brainfart thought up by incompetent management.
Selling Chrysler to Nissan/Renault, now that would be a good fit: Different regional strengths, plus: Renault and Nissan have small cars, Chrysler brings Jeep to the equation. In the case of GM every product already exists twice (under different brands), sometimes even three or four times already.

[Cheryllynn]

My husband is an Engineer for Chrysler. Mix that in with how this election is looking and I’m in need of some anti-depressants:(

[RFEngineer]

GM, Chrysler, Big Gov’t.

What could possibly go wrong?

[Liberty1970]

I feel for you, and pray that things work out well in the coming months and years for you. I am a Tier 1 engineer working with Chrysler and can feel the stress (we are having layoffs too). I don't look forward to going up to CTC for training next month. There's going to be a lot of empty space opening up in that building.

May God bless and keep you and yours.

[Cheryllynn]

Thank you:) Yes, my husband has commented on all the “parking” at CTC in the past year ——well there is about to be a lot more :(

[RichardW]

Outrageous!!