General Motors Corp.'s hopes of buying longtime rival Chrysler LLC are floundering because the auto maker remains unable to secure the financing necessary for the deal, say people familiar with the matter.
Now word comes that GM cannot get the money to close a merger. According to The Wall Street Journal, "Outside money is needed to fund the cost-cutting -- especially buyouts and severance packages for tens of thousands of hourly and salaried employees."
Leaving aside GM's balance sheet, the extraordinary aspect of this story is that deals which had much less merit could get cash from a number of sources two years ago. Now, one of the largest companies in the world cannot get what would be a relative modest sum, perhaps $10 billion. That would indicate that the M&A and IPO markets are virtually gone for the next quarter, the next two quarters, or longer.