Treasury Department rejects GM's call to finance Chrysler merger.
In a front-page story on its Business Day section, the New York Times (11/3, B1, Vlasic, Maynard) reports that "the Treasury Department has turned down a request by General Motors (GM) for up to $10 billion to help finance the automaker's possible merger with Chrysler, according to people close to the discussions." The Treasury Department told GM on Friday that "the Bush administration will now shift its focus to speeding up the $25 billion loan program for fuel-efficient vehicles approved by Congress in September and administered by the Energy Department." According to the Times, "Treasury officials were said to be reluctant to broaden the $700 billion financial rescue program to include industrial companies or to play a part in a GM-Chrysler merger that could cost tens of thousands of jobs."
The Wall Street Journal (11/3, Stoll, Bennett) notes that, "without government help, a merger 'absolutely does not get done,' one person familiar with the matter said." Meanwhile, "the United Auto Workers (UAW) union has so far said relatively little about a merger of General Motors Corp. and Chrysler LLC, but now appears set to emerge as a key player in the fate of any deal." The UAW "recently retained a former adviser to GM Chairman Rick Wagoner to help 'level the playing field' in any discussions about changes in its current contract that could be needed in a tie-up of the two automakers." That adviser, Stephen Girsky, a veteran auto-industry analyst who is president of private-equity firm Centerbridge Industrial Partners, "is expected to help UAW President Ron Gettelfinger evaluate the deal and shape the union's strategy." The Journal points out that, "even if the UAW doesn't need to approve the idling of plants and layoff of thousands of workers, Mr. Gettelfinger's approval could sway banks and lawmakers considering pitching into the deal."
