December 18, 2008 / 4:36 AM / 10 years ago

GM and Chrysler reopen merger talks - WSJ

Dec 18 (Reuters) - General Motors Corp (GM.N) and Chrysler LLC have reopened merger talks, as Chrysler owner Cerberus Capital Management LP [CBS.UL] has signaled its willingness to give away part of its ownership in the auto maker, the Wall Street Journal said, citing people familiar with the discussions.

With cash running low at both companies, Cerberus took the initiative to restart discussions that sputtered just weeks ago, the paper said.

The renewal of the talks could be a way for Cerberus to show Washington, which is weighing a $14 billion rescue package for the auto industry, that it wants to cooperate in restructuring the industry, the paper said, citing people familiar with the buyout firm’s thinking.

The renewal could offer the firm a way to protect its stakes in two distressed auto-finance companies, GMAC LLC and Chrysler Financial, which are crucial to the survival of the Detroit auto makers, according to the paper.

GM and Chrysler could not be immediately reached for comment by Reuters. (Reporting by Ajay Kamalakaran in Bangalore; Editing by Lincoln Feast)

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