Two of America's biggest automakers face possible merger

An article posted on money.cnn.com on February 20th, 2009 stated that government officials may force two American automobile makers, Chrysler and General Motors, into a merger to help them survive the recession. Both companies received federal loans in December to keep them out of bankruptcy and claim they can make it on their own, but for many officials a corporate merger seems like the best solution.

The merger would help both corporations in keeping as many employees on the job as possible, especially Chrysler, who is in a more desperate position than GM. Chrysler and GM both have plans to lay off more workers in the next year, 3,000 and 20,000, respectively, with GM also closing 5 plants by 2012. A chairman for the Center of Automotive Research noted that the smaller the two corporations get, the easier it may be to combine them. Although the merger would in the long run create a stronger company, at the moment it would be quite an expensive endeavor.
On Friday, federal officials met for the first time to lay out plans for the merger. Chrysler's plan was more intent on outlining future profits and benefits of a combined companies; GM said it had no intention of pursuing a combination with Chrysler, and seemed less enthusiastic about the ideas.

This article is important because although not retail related, anything pertaining to the current economy can be informative and beneficial to us as students and our future endeavors. GM and Chrysler are not the first companies to consider collaborations and they will not be the last. You never know, we may see this kind of thing start to happen in retail settings, and that's something we should be prepared for.



Source: http://money.cnn.com/2009/02/20/news/companies/auto_panel/index.htm?postversion=2009022015