Watch CBSN Live

GM-Chrysler? Say It Ain't So -- Please

image Chrysler logoThere's quite a chorus of voices that think the prospect of General Motors taking over Chrysler is a really terrible idea.

Fundamentally, GM already has too many brands, too many trucks, and too many dealers. Why would it want another company that also has too many brands, too many trucks and too many dealers?

GM's weaknesses and Chrysler's weaknesses reinforce each other. "The two companies are not stronger together; two weak companies merged do not make a strong one," said my friend Michelle Krebs at

From a practical point of view, another friendly competitor at is skeptical that a GM-Chrysler deal could deliver the billions in cost savings that are being bandied about.

Analysts at Standard & Poor's said last week that the rumored merger might produce some cost savings, but probably not fast enough to help with the more immediate problems of the credit crunch and the drop in U.S. auto sales.

Maybe some sort of limited cooperation would make sense, like Chrysler's product-swap deal with Nissan, where Chrysler will build the next-generation Nissan Titan and Nissan will build a small car for Chrysler. Chrysler also builds the Routan minivan for Volkswagen.

But again, it's hard for me to see what Chrysler has that GM could want. If GM were to buy Chrysler outright, it looks inevitable that it would just accelerate the cost-cutting and layoffs that are taking place already. Buying something that's already shrinking on its own, only to cut it even more, hardly seems like the best use for GM's cash.

Chrysler and GM are not doing much to quash the rumors. Until the companies put some sort of boundary around the purported deal, the rumor mill is bound to assume the worst.

Chrysler Chairman and CEO Bob Nardelli issued this bland statement on a web site for Chrysler employees last week: "I can tell you that we have approached and have been approached by third parties who are interested in exploring future possibilities with Chrysler. As the Company evaluates strategic options to maximize core operations and leverage its assets, we engage in a dialogue with these parties," Nardelli said.

"It's important for you to know that beyond those partnerships already announced, Chrysler has not formed any new agreements and has no announcements to make at this time," he said.

That, "at this time," is the part that gives employees indigestion.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.