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GM/Chrysler talks intensify

GM/Chrysler talks intensify

General Motors Corp intensified talks to acquire Chrysler LLC on Friday amid a worsening global auto downturn that forced deep cuts of salaried jobs at Chrysler and a warning from France's PSA Peugeot Citroen.
Shares of U.S. automakers and parts suppliers also fell under a broader stock market decline on Friday, including a 26-year low at No. 2 U.S.-based automaker Ford Motor Co which is also cutting back due to the industrywide slowdown.
Chrysler aims to cut about 5,000 salaried and contract workers, or 25 percent of the white-collar staff, amid the auto industry downturn, including extending buyout offers starting in November and involuntary cuts by year end.
However, a combination of GM and Chrysler, and its potential wide-ranging impact on the auto-parts supply base that encompasses thousands of companies and millions of workers, holds center stage in North America.
The core of the discussions between GM and Chrysler owner Cerberus Capital Management would be an asset exchange that leaves Cerberus with all of GMAC LLC and a stake in the automaker itself, sources told Reuters.
Cerberus owns a 51 percent stake in GMAC, GM's former captive finance arm, and would retain ownership of Chrysler Financial, the captive finance arm for Chrysler.
United Auto Workers President Ron Gettelfinger said on Friday the union had met with automakers to discuss the status of potential pending deals, but declined to say which ones, industry publication Automotive News reported.
U.S. Sen. Debbie Stabenow, a Michigan Democrat, also told reporters that GM and Chrysler had not as yet sought government financial support to fund a merger, Automotive News said.
Sources also told Reuters that GM is exploring other plans if the talks fail, including approaching outside investors and the U.S. government, while Cerberus remains in talks with other parties, including Nissan Motor Co Ltd.
In Europe, PSA became the latest to join a growing list of European carmakers to issue warnings, leaving investors wondering whether Volkswagen could hit its own unambitious 2008 targets.
The PSA profit warning came less than a day after German luxury carmaker Daimler cut targets for a second straight quarter and French rival Renault all but junked its long-held 2009 guidance.
Volkswagen, the world's third-largest carmaker, reaffirmed on Friday that it still expects to deliver more cars to customers than last year.
Even Japan's Toyota, considered the healthiest automaker as reflected by its AAA debt rating, is expected to post its first quarterly sales decline in seven years because of the downturn in the U.S. market.
GM, which has been vying with Toyota for world's largest automaker based on sales volume, plans to report third-quarter global sales results next week.
Honda Motor Co also is not expected to escape the downturn in auto markets.


Updated : 2021-05-08 23:45 GMT+08:00