CHRYSLER LLC owner Cerberus Capital Management LP isn't seeking to remove General Motors Corp leaders including Chief Executive Officer Rick Wagoner in a merger of the car makers, a person familiar with the talks said yesterday.
Cerberus also wants a "meaningful" stake, not a majority, in a combined company, said the person, who asked not to be identified because the negotiations are private. It's too early to say whether the New York-based buyout firm would have board representation, the person told Bloomberg News.
Wagoner, 55, is the longest-serving CEO at a United States auto maker, after taking the top spot at Detroit-based GM in 2000. Alan Mulally joined Ford Motor Co in 2006, and Robert Nardelli was hired at Chrysler last year. The person declined to comment on Nardelli's role, if any, in a GM-Chrysler merger.
"GM has good management," said Laurie Harbour-Felax, president of consulting firm Harbour-Felax Group in Berkley, Michigan. She questioned whether Cerberus "could force a change."
Cerberus has been in talks with GM and Nissan Motor Co on a sale, merger or alliance involving Chrysler, whose 25-percent US sales decline through September is the steepest among major auto makers. GM's sales slide 18 percent this year, and the biggest US auto maker has posted almost US$70 billion in losses since 2004.
GM and Cerberus are targeting month's end to complete a deal, while Cerberus and Tokyo-based Nissan also have exchanged proposals, according to people familiar with the matter.
Spokesmen for GM, Chrysler and Cerberus haven't confirmed that the companies are in talks. Cerberus bought 80.1 percent of Chrysler from Daimler AG in 2007, and is negotiating to acquire the rest.
The shrinking US auto market is adding pressure for Chrysler to find savings and stem losses that the company indicated had totaled more than US$1.08 billion through the first half. The third-largest US auto maker has said it had US$11.7 billion in cash at the end of June.
Chrysler said it would eliminate 25 percent of its salaried workforce, or about 4,300 jobs, by the end of the year, and trim capital spending on everything except its most important products. That followed announcement last week of 1,825 job cuts at two sport-utility vehicle plants.
Further "organizational and restructuring" actions will be taken in the near future, Chrysler said at the weekend, without elaborating.