If Fiat dumps Chrysler, will GM and Chrysler merge?


It's beginning to look like the cozy little plan of salvaging Chrysler through an investment from Italy's Fiat is going to fall flat on its face. And if it does, this will leave the U.S. in an awkward position. In addition to forking over another $77 billion to get General Motors Corp. (GM) over its bankruptcy hump, it will need to deal with Chrysler as well. And that could mean more taxpayer money going to finance a merger between the two.

A few weeks ago, it looked like Fiat would give access to technology, platforms and research worth $10 billion in exchange for a 35 percent ownership stake in Chrysler -- thereby taking some heat off the U.S. government. Chrysler has already received $4 billion in U.S. loans, but that will only last for two more weeks, so it wants $9 billion more.