Now this development could be quite interesting, both from an economic standpoint and a legal point of view. If Chrysler becomes a part of GM, what does this do to the US automotive market a a whole?

Shares of DaimlerChrysler climbed yesterday after media reports that General Motors was in talks to buy the German firm's Chrysler division.

Chrysler officials in Germany played down the reports, saying the primary focus now for Chrysler was a restructuring aimed at returning it to profitability. And U.S. industry executives struggled yesterday to assess how GM would benefit from an alliance with Chrysler. GM is in the process of shrinking its operations in an attempt to increase its profit.

Buying all of Chrysler would position GM to remain the world's largest manufacturer of automobiles, a title that Toyota is poised to snatch away in the next few years. But what does this mean in terms of anti-trust issues? I recall that as Chrysler was failing in the late 1970s, there were concerns that GM's market share would force the company's break-up as a monopoly under American law. Would this purchase risk the same sort of legal issue? Or has the automotive industry changed over the last quarter century to such a degree that there is no longer such a legal threat?

Posted by: Greg at 06:30 PM | No Comments | Add Comment
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