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Seven Days: Vermont Car Blog

October 11, 2008

GM and Chrysler Consider A Merger

General Motors and Chrysler announced that they have been in negotiations for about a month trying to find agreement on terms for a potential merger. This would reduce the US Big Three to a Big Two.

It sounds like the chances are still about 50-50 that they will come to an agreement.

Last week Congress and the President quietly signed off on a $25 billion dollar bailout for US automakers. What's clear is that US taxpayers will foot that bill. What's not clear is if it will be enough to save them. I first reported on the bailout early last month.

Automakers are being hit by a perfect storm. They rode the cash cow of pickups and inefficient cars right into the current thrashing of our economy and the specter of global warming. Now they are dealing with the wrong inventory, tight credit and far fewer car buyers.

Both companies have strong developments coming in efficient electric vehicles including the highly anticipated Chevy Volt, but vehicles won't be ready for sale until 2010. Too little to late? Only time will tell.

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