Tag Archives: pontiac

General Motors and Chrysler have held merger talks


The Wall Street Journal, citing people it described as familiar with the discussions, said Cerberus Capital Management, the private equity firm that owns 80.1 per cent of Chrysler and 51 per cent of GMAC Financial Services, proposed trading Chrysler’s automotive operations to GM.

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.

read more | digg story

GM prepares for large cuts in North America. More bad news for Oshawa?


General Motors will unveil further measures on Tuesday to cope with the dramatic downturn in the north American vehicle market.

The world’s biggest carmaker said that the steps, to be outlined at a press conference, are designed “to align the business to current market conditions”. The conference will be attended by Rick Wagoner, chief executive, as well as Fritz Henderson, chief operating officer, and Ray Young, chief financial officer.

GM announced last month that it would close four north American light-truck plants in the wake of an abrupt shift in demand from big pick-up trucks and sport-utility vehicles to more fuel-efficient cars and crossover vehicles.

It is also reviewing the future of Hummer, its biggest vehicle, and accelerating the introduction of more popular vehicles.

GM’s US sales tumbled 18 per cent in June from a year earlier. By contrast, its business in many other countries is performing strongly. It said on Monday that sales volumes in Latin America, Africa and the Middle East jumped 18 per cent in the second quarter to a new record.

International operations now make up about 60 per cent of GM’s sales volumes.

Mr Wagoner last week dismissed talk that the company might seek bankruptcy protection or ditch more of its eight US brands.

However, it is widely expected within the next few months to take steps to shore up its liquidity, with analysts projecting that it will raise between $10bn-$15bn.

It currently has about $24bn in cash reserves but analysts estimate that it is burning about $1bn a month.

Himanshu Patel at JPMorgan said that GM had several options to bolster liquidity, including secured debt, delaying the transfer of its blue-collar healthcare plan to the United Auto Workers union, issuing new equity and further trimming capital outlays.

GM shares are currently at their lowest level in more than half a century. They slipped another 5.4 per cent on Monday to $9.38.

read more | digg story