PRESSURE from lenders appears to be forcing merger talks between General Motors and Chrysler.

Motor industry experts believe that the two companies are keen to finalise the merger before the US presidential elections and hopefully for government financial support for the ailing US car industry.

The aim is to combine both organisations in some way in an attempt to bring together new technologies, maximise cash returns and potentially reduce losses.

Private equity house Cerberus, which owns 80% of Chrysler and has a controlling 51% stake in GMAC, GM’s finance arm, is at the centre of the talks.

It is believed that a merger between Chrysler and GM could lead to the sale of a number of brands, including Chrysler’s Jeep 4x4 operation.

GM has said that it aims to sell the Hummer brand as soon as possible.

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