Sources say Chrysler merger taking back seat to GM survival

Knowledgeable sources say General Motors will not include a merger announcement in its “important changes” to be announced tomorrow along with its quarterly earnings. In fact, they say merger discussions have taken a back seat to GM’s push for federal financial aid to help the automaker to stay afloat.

The word on the street is that GM’s numbers are so dismal, the company may need to secure a bailout before President-elect Barack Obama takes office on January 21, 2009. Michigan legislators are already pushing for an additional $25 billion in low-cost loans that could be used for current business needs. The U.S. Department of Energy has announced interim rules for the $25 billion package already approved by the government, and it’s possible it could accept applications as early as December 31, but those funds are restricted to factory upgrades and development of more fuel-efficient vehicles and cannot be used to cover ongoing operating expenses.

The CEOs of the three Detroit automakers and Ron Gettelfinger, president of the United Auto Workers union, are scheduled to meet with House Speaker Nancy Pelosi today to make their case for rapid Congressional action. Speaker Pelosi, along with other top Democratic lawmakers, are in favor of direct federal support to the U.S. auto industry.

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