Could GM, Chrysler Have to Share to get Easy Loans?

Easy loans, tough competition

If automakers in the U.S. want more easy loans from the government, they may face some big changes. As General Motors seeks to separate itself from European brand Saab, some government officials are considering uniting GM with another company: Chrysler.

As one might imagine, the automakers are not crazy about holding hands with their competition.

Why merge?

The most compelling argument for merging the two companies is to retain jobs. Chrysler is struggling even more than GM, and facing a lot more layoffs on top of the ones already made. Officials think that uniting the two companies could possibly save Chrysler, and thus save lots of jobs.

Why not merge?

The government already issued bailout money to both auto companies in December. At that time, the idea of merging the companies was brought up. The reason they didn’t follow through with this idea before was cost. It will cost billions of bucks to close extra factories and dealerships and combine operations.

Kimberly Rodriguez, head of the global auto practice at Grant Thornton Advisory Services, said she thinks the government will at least consider whether it would be better to loan them even more money so they can combine and emerge as a stronger company down the road, according to CNNMoney.com

More money and still more problems

The U.S. Treasury  gave Chrysler and GM a combined $17.4 billion in easy loans last year. And still, the U.S. auto industry is clamouring for more money. The two companies have asked for up to $21.6 billion more. Both companies were required to draw up viability plans, and they submitted those plans, fundng reqests in place, to the government last week. ... click here to read the rest of the article titled "Could GM, Chrysler Have to Share to get Easy Loans?"