GM and Chrysler? Good or Bad?

Written by: Andy Watkins
Editor - BusinessDetroit.com

The media has been publishing story after story of a possible merger between two of the largest U.S. automakers this week. General Motors and Chrysler may become one very large auto company, but does this make any sense. If this does occur will it save them from going out of business, will it lower their overhead or will it just delay the inevitable distruction of both car companies. These are all great questions, but if it does happen, whoever does the buying the other will lay in waste. If GM decides to buy Chrysler in these uncertain times then it could destory their existence forever. Why don't they wait and just work on lowering their overhead internally first, get rid of all the bad assets, then merge as one making them a solid new company with little waste. If they decide to merge prior to the cut backs I fear that the UAW will fight them on every cut back the new company makes knowing perfectly well that they are in big trouble.

The merger between the two is a good idea because it will lower production costs, overhead and operation costs including labor costs. The auto industry needs less players in order for it to stay alive. Since the 1970's automakers have each lost market shares due to the large increase of new car companies around the globe. We currently have about 4 to 5 too many car companies, so if this merger does occur it will help all the automakers in the industry.