TWO of the biggest players in the US car industry are threatening to merge to save themselves from potential bankruptcy, at the expense of thousands of workers.
General Motors has talked in recent weeks with rivals Ford and Chrysler about combining forces with one or other of them, in the hope of finding the massive new cost savings that are required to make up for plunging sales.
GM and Chrysler are hemorrhaging money, despite cutting 100,000 jobs since the start of the decade. GM lost $15.5bn in three months, according to its latest results, and has promised more production cuts across the world.
Negotiations between GM and Chrysler came after talks between GM and Ford, but discussions with Chrysler have reportedly stalled in the past week; said to resume at a later date.
Between them, GM and Chrysler employ 130,000 people, mainly in Michigan, which is said to have one of the worst rates of unemployment and declining house prices in the country.
Reports have indicated that GM is losing $1bn a month, and while it is said to be able to ride out the rest of the year, fears of a debt downgrade next year which would kill the company, could be realised.
Ford, facing a similar threat, has been trying to sell its stake in Japanese car maker Mazda.