Business Week reports, "At a few recent meetings, General Motors executives have mused aloud about the prospects of a merger with rival Ford Motors."  The idea "went no further than some internal banter, according to sources briefed on one of the meetings."  GM executives concluded "that it would be a huge distraction at a time when management needs to focus on a turnaround."  Business Week comments, however, that "the very fact that anyone [at GM] brought it up shows just how much peril America's carmakers face." 

The theoretical merger would have some benefits.  "Savings from overlap in massive overhead costs would save the combined entity billions," Business Week notes, and "its combined cash hoard of more than $50 billion could help the company survive what most analysts expect to be a year or two of weak sales."

Autoblog points out the problems with the idea. "Between plummeting sales, increased material costs, high fuel prices and union woes, both automakers are facing seemingly insurmountable challenges. But creating a $350 billion bloated corporate entity with excess production capacity, weak brands and more cannibalizing product overlap than has ever been seen, there's no doubt that it would be suicide for all involved. Not to mention the fact that the amount of resources necessary to pull of such a Herculean task would take precious time and money away from righting both automakers and their ailing product portfolios."

We don't see it ever happening, but the discussions alone are stunning.  The automotive press has recently begun to speculate that at least one U.S. automaker may not recover from the current nationwide auto sales slump.  Now, executives are beginning to play with the idea of merging the oldest domestic automakers.  It's not a real possibility, but it is proof that even the top minds in the industry don't know what the next few years will do to the U.S. automotive market.  The Chevy volt apparently can't get here fast enough.

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