General Motors is denying reports that it has resumed merger talks with Chrysler.
A Thursday report in The Wall Street Journal, citing people close to the discussions, said the automakers had gone back to the table after talks were shelved a few weeks ago so the companies could focus on dealing with the recession.
But GM spokesman Tony Cervone told The Associated Press on Thursday that the company's stance on the merger talks has not changed, and the two groups are not back at the negotiating table.
The newspaper reported that the discussions were reopened after Cerberus Capital Management, the owner of Chrysler, signalled it was willing to give up part of its ownership rights on Chrysler.
The paper cited sources that said the move could be held up by the automakers as evidence they are co-operating to restructure -- something Washington has demanded if a proposed US$14 billion bailout is to go forward.
In Toronto on Thursday, Ontario's Premier Dalton McGuinty suggested that a merger might be a good idea.
"I think there's a lot of balls up in the air when it comes to the auto sector, and I think it's responsible on the part of the players to explore ways that they might further strengthen themselves. So that could prove to be good news," he said.
On the issue of financial assistance for the companies, McGuinty said, "We will continue to work closely with the federal government and through the feds, with Washington, to see what we can do to put the industry on a stable footing so they can turn themselves around."
Plant shutdowns
On Wednesday, Chrysler said it would take steps similar to those taken by GM and Ford, halting production at 30 North American plants over the holidays, beginning tomorrow.
Most workers won't return to their jobs until Jan. 19, at the earliest. And the minivan plant in Windsor, Ont. could stay closed until Feb. 2.
Meanwhile, fear is starting to build among Chrysler's Canadian workforce.
"I'm concerned. How could I not be? The whole industry around us is collapsing and you get up every morning and the news gets worse and worse," Rick Laporte, CAW Local 444 president, told Canada AM.
He said he believes the shut down will mark the first time in the history of the North American automotive industry, that both GM and Chrysler will suspend operations for an entire month.
The closures come as the automakers attempt to prevent a pileup of unsold vehicles in car lots across Canada and the U.S., amid the slowing economy and reduced sales.
Chrysler said its dealers have lost 20 to 25 per cent of their sales volume, because consumers are having trouble getting financing to buy vehicles.
In the U.S. alone, 46,000 Chrysler employees will be off work during the temporary shutdown.
Chrysler has 9,800 employees in Canada.
Ford said it will shut down 10 of its North American plants for three weeks -- a week longer than had been planned.
GM has also announced it intends to halt construction of a plant linked to the Volt plug-in electric car.
With a report from CTV Toronto's Paul Bliss
