Sunday, October 12, 2008

A potential merger weighs on Detroit

The New York Times and other newspapers are reporting that General Motors is in preliminary talks with Chrysler to merge. It should be emphasized the talks are preliminary. I also heard that GM had approached Ford earlier.

My personal take is this: two declining auto manufacturers become one declining auto manufacturer. Great idea!

Still, many Detroiters believe it would be better for G.M. to swallow Chrysler before an outsider.

“Should this happen, look for a lot of bloodshed,” wrote one person who posted a comment on a local Web site called “However, it is better than another alternative — a Chinese company buys up Chrysler.”

It is just another measure of the impact of the old Big Three on a city that once symbolized the manufacturing muscle for the nation.

“Ten years ago, Detroit was under intense pressure, but it always had access to money to borrow in the market,” said Mr. Casesa. “Well, that’s just not true anymore. In this case, being poor has taken Detroit’s swagger away.”

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