GM/Chrysler merger talks gain traction during congressional hearing

In November, GM ended its ongoing talks with Cerberus Capital Management to take Chrysler LLC off their hands due a failure in getting funding for a possible merger. Well, it seems like Big 3’s struggle and desperation to get $34 billion in funding has breathed life back into a possible GM/Chrysler merger.

Chrysler CEO Bob Nardelli told the Senate committee yesterday that he would support a merger with GM if it became a condition for the government to provide the automakers with loans. GM CEO Rick Wagoner responded saying that GM would seriously consider such an option but he would prefer such a move be negotiated with the UAW. According to Automotive News, Nardelli said a GM/Chrysler team would save $8 billion to $10 billion a year in a combined company through plant reductions, job cuts, and sharing the cost of developing vehicles.

Sen. Robert Bennett, R-Utah, said that the government should consider requiring the merger to be a condition of giving loan money to the two companies. Gettelfinger, UAW president, said that he would be opposed to such a merger since it would cost the industry thousands of hourly jobs. Nardelli responded saying that if such a deal was to go through “The first job to go would be mine.”