US to GM on Merger Aid: Hit the Road

Chrysler merger uncertain after $10B request is nixed
By Jess Kilby,  Newser User
Posted Nov 3, 2008 2:49 AM CST
Employees leave the GM plant last month in Janesville, Wis. GM has announced it will shut down its Janesville sport utility vehicle factory.   (AP Photo/Andy Manis)
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(Newser) – A possible merger between GM and Chrysler is now up in the air since the Treasury Department refused late last week to grant GM’s plea for $10 billion to help finance the deal. Treasury officials are trying instead to fast-track a $25 billion loan program to help automakers get up to speed on production of fuel-efficient vehicles, reports the New York Times.

Tens of thousands of jobs would likely be lost in the merger, which made Treasury officials reluctant to play a role in the operation. They also may be hesitant to take any action that may conflict with the goals of the incoming president. Barack Obama has said that he supports further aid to the sputtering auto industry, but John McCain hasn’t made his stance known.