GM Asks Fed for $5 Billion for Chrysler Merger

GM has been in talks for the past few weeks to merge with Chrysler, but in order for the deal to happen, GM would need to borrow $5 billion. Several possibilities have been discussed for the source of the money, including the U.S. Treasury buying a stake in GM.

Rick Wagoner, GM’s Chairman and CEO, was in Washington last week meeting with the Treasury and lawmakers. Wagoner argued that a GM-Chrysler merger would be best for America in these tough economic times.

A merger between GM and Chrysler could potentially save both companies from bankruptcy. If either company were to declare bankruptcy, it would mean thousands of jobs lost in a time when the economy is already hurting.

GM is also pushing for funds to be made available as soon as possible from the $25 billion loan approved earlier this year, reports The Detroit News. Money from the loan was planned to be dispersed in the beginning of 2010, but with auto sales plummeting it may be needed sooner.