agent Entrepreneur logo
MenuMENU
SearchSEARCH

Obama Auto Task Force: GM, Chrysler in Merger Talks in 2008

November 24, 2009
2 min to read


WASHINGTON - Detroit's Big Three automakers came closer than America realized to becoming the Big Two, according to reports by The Detroit News.

General Motors Corp. ended merger talks with Chrysler LLC in November 2008 to focus on getting emergency federal aid, but Chrysler continued to believe a tie-up with GM was its best chance for survival.

Ad Loading...

In April, as both automakers were surviving on government aid and fighting bankruptcy, Obama administration officials spent two weeks working on a plan for GM to acquire Chrysler's best assets and keep the doors open on a third of its factories.

Some members of President Barack Obama's auto task force saw it as a fallback position if Chrysler failed to reach a partnership deal with Italy's Fiat SpA. Other members opposed it. But top task force officials ultimately decided it was too late in the game for a merger, too complicated and would cost too many jobs compared to an alliance with Fiat.

The GM-Chrysler tale is among new details that emerged in Detroit News interviews with more than a dozen insiders -- automakers as well as government officials -- over the past two months.

They reveal the much greater government role in the historic bailout of both companies than has been disclosed previously.

Faced with the prospect of losing 1.1 million direct and indirect American jobs, as well as a major leg of the nation's economy, the government believed it could not afford to let the industry fail.

Ad Loading...

In the end, the GM and Chrysler bailout resulted from fortunate timing and the work of a group of unknown Wall Street veterans. Under the aegis of the White House, and without congressional approval, they forced a restructuring that the automakers themselves had been unwilling or unable to accomplish -- even as they saw disaster looming.

Among the other revelations from those inside the auto industry bailout:

  • The White House auto team negotiated with billionaire investor Carl Icahn to buy parts supplier Delphi Corp., but the deal wasn't sweet enough for him to sign on. Delphi is now in the hands of its bankruptcy lenders.

  • GM told the government it couldn't exit bankruptcy in the end of August or September, but was pressured by the task force to exit in early July.

  • GM asked the United Auto Workers to freeze the hourly pension plan; the UAW refused.


Topics:Industry

More Industry

Shifting Loan Demands A Sign of the Times, Loan Application paperwork with a pen and a car outline, Auto Dealer Today
Industryby Lauren LawrenceMay 8, 2026

Auto Loan Outlook Shows Cracks

Recent survey data shows that the overall demand for auto loans is down, but the demand for subprime loans is up as consumers face economic uncertainty and affordability pressures.

Read More →
Photo of buyer and seller representatives in Waco Mitsubishi sale outside the dealership
Industryby Hannah MitchellMay 7, 2026

Lone Star State Store Sells

The Mitsubishi location moves from one Texas automotive group to another, continuing this year’s spate of brisk buy-sell activity.

Read More →
2026 Mitsubishi Outlander in front of the company’s first national Gallery dealer facility
Industryby Lauren LawrenceMay 7, 2026

Mitsubishi Gallery Makes Progress

As part of its 2030 business plan, Mitsubishi's North America arm will soon open its first 'gallery' store in Tennessee, where customers can learn about the brand, vehicles and technology.

Read More →
Ad Loading...
hand signing paperwork on a clipboard on top of a desk with a gavel to the side

Senators Propose Chinese Connected Car Ban

Just weeks before President Trump is set to meet with the Chinese president, two U.S. senators proposed a bill with the aim of protecting Americans’ data.

Read More →
Photo of work team at a U.S. Subaru hybrid vehicle plant
Industryby Hannah MitchellApril 30, 2026

Consumers Gravitate to Hybrids

A study of Q1 used-vehicle sales shows many consumers are looking to minimize fuel costs but aren’t willing to go all electric and no longer have a tax break incentive to do so.

Read More →
family in a car, Affordability Out the Window, Auto Dealer Today
Industryby Lauren LawrenceApril 24, 2026

Bad Credit Tanks Attainability

A recent study suggests expectant parents are feeling the burden of bad credit more than other demographics when it comes to buying a new car.

Read More →
Ad Loading...
Photo of two men in suit jackets shaking hands next to new car inside of a dealership
IndustryApril 23, 2026

A New Consumer Culture in the Auto Dealership

Dealers should aim to build a positive work environment, helping employees execute an efficient experience, from their online research to the final delivery of the vehicle.

Read More →
Closeup of the side of an Audi car
Industryby Hannah MitchellApril 23, 2026

New-Vehicle Sales Down

A cloudy April forecast was expected due to last April’s sales surge in anticipation of U.S. trade tariff-inflated prices. Meanwhile, automakers pumped up incentives to address today’s consumer wallet woes.

Read More →
Photo of Ford F-150 grill with nameplate
Industryby Hannah MitchellApril 20, 2026

Will Extended-Range Autos Make Inroads?

EREVs, also known as ‘series hybrids,’ may catch on in the U.S., where they currently have barely a toehold, as automakers tilt away from some purely electric models and consumers crave more range.

Read More →
Ad Loading...
Photo of Cadillac Lyriq SUV on road with partly cloudy sky in background
Industryby Hannah MitchellApril 16, 2026

Used Autos Selling for More

A recent price spike due to several larger market forces, though it hasn’t dulled demand, is pushing more consumers to efficient models to squeeze in buys.

Read More →