UPI NewsTrack Business

GM, Chrysler reportedly talking merger

DETROIT, Oct. 11 (UPI) -- General Motors Corp. and Chrysler LLC are discussing a merger that could reduce the Big Three U.S. automakers to the Big Two, The New York Times said.

Sources close to talks between GM and Cerberus Capital Management told the Times the possibility of the two companies coming together was about 50-50 on Friday. Cerberus is a private equity firm that acquired Chrysler from the German automaker Daimler.

The negotiations have involved senior executives from both sides, the sources said.

The combination of high gas prices and a slumping economy have been difficult for U.S. automakers. Sales of high-profit light trucks and sport utility vehicles have tumbled.

GM, which long dominated the U.S. and world auto industry, is spending its cash reserves. Chrysler, now privately held, does not have to release financial statements.

Cerberus has also begun talks with Nissan, Renault and other automakers, the newspaper said.

Morgan Stanley, Mitsubishi may renegotiate

WASHINGTON, Oct. 11 (UPI) -- Renegotiation may be in the works for a proposed $9 billion investment into struggling Wall Street firm Morgan Stanley by a Japanese bank, sources say.

With Morgan Stanley's share price continuing its freefall on Friday, plunging 22 percent, or $2.77 per share, to $9.68, unnamed financial analysts are saying it's likely Mitsubishi UFJ Financial Group will want to change the terms of its preliminary deal to throw Morgan Stanley an economic lifeline, The New York Times reported Saturday.

Mitsubishi struck its deal with Morgan Stanley nearly three weeks ago at $25.25 per share, and with that premium widening by the day, speculation is growing that Mitsubishi will choose to renegotiate or even scuttle the deal. The Times said other possibilities being mentioned including Mitsubishi buying the entire firm, a merger with a U.S. bank or a U.S. government buy-in.

The newspaper noted Mitsubishi executives were in Washington this weekend for meetings of the International Monetary Fund and that Morgan Stanley executives have been in close contact with the bank all week.

Neither Morgan Stanley nor Mitsubishi officials would comment on the renegotiation rumors.

Lame-duck Congress may vote on stimulus

WASHINGTON, Oct. 11 (UPI) -- Democratic leaders may reconvene the U.S. Congress soon after the election to work on an economic stimulus package.

House Speaker Nancy Pelosi, D-Calif., has scheduled a meeting Monday in her office with leading economists and the Democratic leadership, The Wall Street Journal reported.

"We have some harsh decisions to make," she said. "Some of them can't wait until January."

Democrats are considering a bill that would put billions of dollars into the hands of the public, a one-time infusion of spending power they hope would kick start the economy. President George W. Bush opposes additional efforts to use consumer spending as a stimulus.

Aides said the $150 billion package would combine spending for infrastructure like roads and bridges and a possible tax rebate.

While no final decision has been made, leaders are said to be considering a lame-duck session starting Nov. 17.

S. Korea to privatize, restructure firms

SEOUL, Oct. 11 (UPI) -- South Korea says it will privatize and restructure 30 government-owned companies in a bid to increase their productivity.

Included on the list are the Korea District Heating Corp., Korea Power Engineering Co. and Korea Plant Service and Engineering Co., of which Seoul will sell between 40 percent and 49 percent of the government's stake, the South Korean Yonhap News Agency reported Saturday.

The moves are the third and final phase of President Lee Myung-bak's program to improve the nation's competitiveness, the news agency said, adding that public-run companies receive $18.5 billion in taxpayer subsidies each year.

Vice Finance Minister Bae Kook-hwan told reporters that the new phase calls for the privatization of 10 companies, the merging of seven other firms into three, the shuttering of two and reorganization of one.

Bae said the government will retain at least 51 percent stakes in the district heating corporation to prevent price hikes, while two of its subsidiaries providing services to Ansan and Inchon are to be sold off to the private sector, Yonhap reported.

Amtrak sets ridership record, revenue up

WASHINGTON, Oct. 11 (UPI) -- The U.S. passenger rail system Amtrak says it has recorded an all-time ridership record thanks in part to crowded highways, airport hassles and high gas prices.

Amtrak officials said the system's fiscal 2008 ridership increased to 28.7 million passengers, marking the sixth straight year of gains and setting a record for the most passengers using Amtrak trains since it started operations in 1971.

The riders brought in $1.7 billion in ticket revenue for Amtrak, a 14.2 percent increase over last year's $1.5 billion.

"After another record-breaking year, in which the railroad achieved double-digit growth, Amtrak has solidified its role as a leader in the nation's transportation network and proven intercity passenger rail's relevance in today's world," said Amtrak President and CEO Alex Kummant. "Highway and airway congestion, volatile fuel prices and increasing environmental awareness all contributed to Amtrak's successful year, as did our continually improving service and on-time performance."

Kummant said a new capital matching program law passed by the U.S. Congress will spur states to establish new passenger rail service with Amtrak in high-growth U.S. rail corridors.