The proposed merger between Chrysler and GM has been put on hold. The Bush administration ruled out funding a loan that would back the merger. Both automakers have been struggling to survive and news of this block casts a shadow on the thousands of jobs that Chrysler and GM provide.
This places any chance of a deal between the two companies out of the question until after the Presidential election, sources said. Until representatives of the automakers can sit down with the new administration, the deal is dead in the water.
This does, however, bring Nissan-Renault back into the equation as they have already expressed interest in a deal with Chrysler.
GM was seeking $10 billion in loans from the government to sponsor the merger, but the U.S Treasury Department has declined. Instead the administration is working to speed the distribution of $25 billion in low-cost loans for factory re-tooling.
Some analysts doubt the proposed merger, estimating that it could result in the cut of up to 200,000 jobs.
Source: Automotive News