Sunset for Chrysler?

October 30, 2008
With the economy simply not able to support three Detroit automakers, claims Detroit News' Alisa Priddle, a GM/Chrysler merger is looking more and more attractive as opposed to one of those players filing for bankruptcy. She claims that even the "best-case scenarios are likely to result in the loss of up to 70,000 jobs including as many as 35,000 blue- and white-collar jobs in Michigan."

Priddle quotes Patrick Anderson, principal and CEO of Anderson Economic Group, who said Wednesday: "A merger of some type is likely to occur because the economics now are unsustainable for three Detroit automakers." He believes that if the companies continue their current job-slashing and cost-cutting, at least one of them (likely Chrysler) will pursue bankruptcy filings or "be sold piecemeal." He also points out that Chrysler owner Cerberus Capital Management is unlikely to hold on to a sinking ship and will quickly examine both auction and chapter 11.

Bankruptcy for any of these manufacturing giants would likely be a very expensive proposition for both the government and an already ailing economy. Regardless of what occurs, the ripple effects of job losses and production adjustments will be felt throughout Wall Street and Main Street, from parts suppliers to dealers, and assembly line worker to CEO.--Colin Mathews

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