GM-Chrysler merger talks on pause

DETROIT — Merger talks between two struggling auto giants have reportedly reached an impasse and will be placed on temporary hold until after the U.S. presidential elections today.

Last week the Bush administration decided the government would not help finance a merger of GM and Chrysler. Both vehicle makers were seeking $10 billion-$15 billion in government to make the agreement happen.

It’s likely the companies want to see how a new regime in the White House responds to their pleas.

In the meantime, Cerberus Capital Management LP — the private equity firm that owns the majority of Chrysler — will reopen talks with other potential suitors interested in acquiring the floundering automaker.

The Big Three automakers have been lobbying for some form of government aid since the government announced a $700 billion package to rescue financial markets from the current economic crisis.

According to industry analysts, if a merger between GM and Chrysler were to take place, the former would keep only a small fraction of Chrysler’s model lineup.

Up to 14 assembly plants in North America could close as well, putting struggling parts suppliers and others in the supply chain at even bigger risk.