General Motors Corp. and Chrysler denied a report Thursday that the Detroit automaker and Cerberus Capital Management LP have restarted talks to combine the ailing automakers.
The Wall Street Journal reported Thursday that talks about a tie-up were resumed after Chrysler’s parent, Cerberus Capital Management LP, Chrysler’s majority owner, signaled it is willing to part with some of its stake in the automaker. The Journal later reported the talks were focused on combining GMAC and Chrysler Financial — though Cerberus owns a majority of both companies. The Journal said it is just one of a range of options the automakers are exploring. GM owns 49 percent of GMAC.
GM spokesman Tony Cervone said GM’s stance on the merger talks has not changed since the automaker announced on Nov. 7 that it had suspended them, saying the company was focused on improving its liquidity. He said there had been no ongoing merger talks between the two companies since that announcement.
Chrysler also denied the report. “There is no truth to the rumor. Chrysler is not in discussions with General Motors,” Chrysler spokeswoman Shawn Morgan said.
A Cerberus spokesman also would not comment.
A person familiar with the matter said GM and Cerberus do have ongoing talks about business matters, but declined to elaborate.
GM and Chrysler began talking in September about combining, but talks fell apart after the companies couldn’t raise enough money to finance the deal. Chrysler has reiterated it is still pursuing additional alliances or other partnerships.
The report emerged as the Bush Administration mulls options to provide immediate aid to the two the automakers after the Senate failed to approve $14 billion in loans for GM and Chrysler to prevent them from collapsing. An announcement from the White House could come by Friday.
President Bush said Wednesday a deal could come soon. “I’m thinking it through, you know,” Bush told Fox News. “It needs to get done relatively soon.”
Both GM and Cerberus have been in discussions with Treasury officials about the size and scope of an aid package.
The Treasury is expected to tap some of the remaining funds from the first half of the $700 billion Wall Street bailout package, the Troubled Asset Relief Program (TARP), but it hasn’t ruled out aid to ensure an “orderly” bankruptcy filing by the two automakers.
Automakers face sinking auto sales and have taken steps to reduce expenses and production. Chrysler said it will close all of its factories starting Friday for at least a month. Ford Motor Co. is extending its holiday shutdowns at 10 plants by a third week, while GM has postponed work on a $370 million engine factory in Flint.
Ford sought a stand-by $9 billion line of credit but says it has enough money to make it through 2009 unless the economy worsens.
GM chairman and CEO Rick Wagoner and Chrysler chairman CEO Robert Nardelli told the Senate Banking Committee earlier this month that they would be open to considering restarting merger talks if it were a condition of federal aid.
“I would be very willing to look at it seriously,” Wagoner said. “We are certainly willing to look at it and consider it very seriously.”
Sen. Robert Bennett, R-Utah, was one of several members who said a merger made sense.
“Everything I’ve seen suggests to me a merger between GM and Chrysler is a good idea,” Bennett said. “It’s a marriage that makes sense. All the work has been done. So it could be done. … Papers could be signed very quickly.”
Cerberus also had discussed a possible deal with the Renault-Nissan alliance, but the parties broke off those discussions last month. The Renault-Nissan alliance had proposed to bring Chrysler into the French-Japanese partnership, while GM had considered an outright acquisition of Chrysler.