General Motors and Chrysler Pushing for an Urgent Deal

October 20, 2008 · By Faizan Filed Under Economy, Finance, Lead Story, News Tagged as: Auto Market, Bailout, Chrysler, GM

America’s biggest and the World’s Second largest automaker GM is feeling the heat from the Global financial crisis. The firm is seeking a merger deal with competitor Chrysler just days before the Presidential election. The US auto market has been hit hard and sales continue to decline. General Motors lost its position as the World’s Largest Automaker hardly a month ago.

According to a local Detroit Newspaper, executives from Cerberus Capital Management, a private equity group that bought an 80.1% stake in Chrysler from Daimler AG in August last year, and GM are eager to polish off the deal before their positions exacerbate by declining sales.

Both Companies losing money rapidly, according to estimates made by various analysts General Motors is burning at least 1 billion dollars per month to be specific. The credit crunch has left Banks and major financial organizations unwilling to lend money to the industry.

Both the Companies are hotfooting to conceal the deal before Americans head to the polls on Nov. 4th. They also are seeking help from the US government along the lines of the $700 Billion bailout plan. The US auto market accounts for a large number of jobs in Michigan and Ohio which both are significant game makers in US presidential race.

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