Legacy Automotive Shrinks

The current economic crisis is another blow to the US automakers. The high price of gasoline hurt large size vehicle sales. Then the lack of demand for both new and used large sized vehicles hurt the resale value of all of those vehicles currently being leased. their value plummeted. The big three had to write of billions of losses. Then the credit crisis and drop in consumer confidence hurt ALL vehicles sales.

Somehow GM and Chrysler started to discuss merging. I don't know how these things start. I suppose the big dogs sit around in the board room and toss this stuff around. Maybe Cerberus first broached the subject. There has been news leaking about discussions for weeks. Forbes writer Joann Muller wrote an article, Picking Over Chrysler's Bones, with some further details.

Only seven of the 26 models in Chrysler's lineup are likely to be retained if General Motors merges with Chrysler.... They are the Chrysler Town & Country and Dodge Caravan minivans; Jeep Grand Cherokee and Wrangler SUVs; Chrysler 300 and Dodge Charger sedans; and the Dodge Ram pickup. Together, those core models account for 56% of Chrysler's sales.

The alternative to a merger is apparently bankruptcy. Even with the better option of a merger, Muller's article details some of the expected fallout:

....up to half of Chrysler's 14 assembly plants would close, resulting in 24,000 hourly and administrative job cuts, Grant Thornton says. (About 5,000 cuts have already been announced.) In all, the company says 30,000 to 40,000 of Chrysler's 67,000 existing jobs would be eliminated.

That is darn close to 60% staff reduction.

Cartoon about the topic here.
Intersting discussion about it here: new big three; Toyota, Ford/Mazda, Honda?