Merger rumours are never far below the surface in the globalised car industry, but the latest one seems to be gaining traction.
General Motors may be ailing but, according to blue-chip news agencies, talks are well advanced on GM taking over the Chrysler-Dodge-Jeep combine.
Chrysler is owned by Cerberus Capital Managment, a private equity group that would, so the reports claim, like to get out of the car-making business just as fast as it got into it.
The attraction to GM is said to be Chrysler’s cash pile of nearly $12bn. GM is burning through $1bn per month and its financial state means it cannot borrow money from the credit-crunched money markets.
But the consequences of GM swallowing Chrysler would be a job-loss blood bath. Many of Chrysler’s factories would be shut and a fair chunk of its 33,000 employees thrown out of work. And then there are the hundreds of Chrysler’s 3500 dealers that will also be closed.
GM bosses would then have to decide how to fold what remains of Chrysler, Dodge and Jeep into its global manufacturing system. If there’s life left in these brands - and Chrysler’s design and marketing teams can come up with convincing products - they could be built on GM platforms, filling up factory capacity around the world.