GM 'holds merger talks' with Ford and ChryslerA deal could change the face of US car industry
16 October 2008
Shares in US carmaking giant General Motors (GM) surged on Monday after reports it had held merger talks with its main American rivals, Ford and Chrysler.
A firm deal is not yet thought to be imminent, but investors reacted well to the prospect of a ‘supercompany’ that could cope well with the pressures of a weakened global market.
GM and Ford shares soar
Shares in GM closed 33% up on Monday at $6.51, The Times reported, while shares in Ford leapt 24% to end the day at $2.47.
Chrysler chief executive Bob Nardelli told staff he was talking to a number of parties about potential tie-ups. Ford declined to comment.
GM said its officials routinely discuss issues of mutual interest with other carmakers.
‘As a policy, we do not confirm or comment publicly on those private discussions, which, in many cases, do not lead anywhere,’ a GM spokesperson said.
A deal between any of the carmakers would change the face of manufacturing in Detroit, the USA’s Motor City, and could leave thousands out of work.
Car sales are now at their lowest level since the early nineties.
The manufacturers’ problems are compounded by higher petrol prices, a slump in demand for SUVs and the fact consumers – excluding those with exceptional credit ratings – are struggling to get loans at the showroom.
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