General Motors and Chrysler in merger talks

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GM Rethinks Fuel Efficiency and Brand Futures

General Motors and Chrysler are in merger talks. This is not a typo. The world may soon become filled with Dodge Volts, Hemi Impalas and Chrysler Yukons according to a Wall Street Journal story.

Cerberus Capital Management owns 80.1 percent of Chrysler as well as 51 percent of GMAC Financial Services. The proposal would have a swap of GM’s remaining 49 percent of GMAC for Cerberus’ stake in Chrysler. The talks have stalled because of the recent turmoil in the financial markets, according to the Journal. Its sources said negotiations could resume if markets stabilize because both GM and Cerberus want to quickly divest the assets under discussion.

Besides solidifying General Motors as the world’s largest automaker and changing Detroit’s "Big Three" into the the "Big Two", if this merger does happen some interesting scenarios could take place. The two brands that AM General spawned (Jeep and Hummer) would now be back together. If rumored negotiations with the Fiat Group to build cars at surplus Chrysler plants continued, then GM and Fiat will be back working closely together again.

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