GM, Chrysler say could reconsider merger
DETROIT (Reuters) - General Motors Corp (GM.N) and Chrysler LLC said on Thursday they would be open to a merger if the U.S. government mandated it as a condition for providing the emergency financing they say is needed to allow them to survive into 2009.
GM Chief Executive Rick Wagoner and Chrysler Chief Executive Bob Nardelli were testifying at a U.S. Senate Banking Committee hearing held to consider a request for $34 billion in aid from Detroit's three automakers.
The comments appeared to revive the chances for a merger analysts have said would slash tens of thousands of U.S. auto jobs as a combined Chrysler-GM cut overlapping factories and headquarter operations in Detroit.
Nardelli said Chrysler's analysis showed that a merger between GM and Chrysler could reduce costs of the combined operations by between $8 billion and $10 billion.
Wagoner, who has asked for $18 billion in emergency government funding for GM, agreed that a merger with Chrysler presented an opportunity for "significant cost savings."
He said GM was willing to consider such a strategy if it were a condition for receiving federal funds.
"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."
"A MARRIAGE THAT MAKES SENSE"
Sen. Robert Bennett, a Republican from Utah, endorsed a merger between GM and Chrysler as a step worth considering as the government weighs rescuing a key manufacturing sector.
"Everything I've seen suggests to me a merger between GM and Chrysler is a good idea," he told the hearing.
"It's a marriage that makes sense. All the work has been done. So it could be done," Bennett said. "Papers could be signed very quickly."
GM executives had talked to Chrysler's owner Cerberus Capital Management CBS.UL about an acquisition of Chrysler starting in September and continuing through October.
At one point, GM had requested $10 billion in public funding to support the rescue package, according to people familiar with the discussions.
The talks were shelved in late October, a move acknowledged by GM and then Chrysler in November. But, until Thursday's hearing, executives from both sides had not discussed the proposed merger publicly.
The disclosure was one of the standouts in over five hours of testimony before the Senate Banking Committee. Continued...
