Merging with Chrysler would subsist GM’s biggest attempt yet to realign by the market. Problem is, GM has always been terrible at restructuring

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General Motors Chairman and CEO Rick Wagoner. Getty Images

By David Welch

General Motors (GM) is acquirement closer and closer to attractive Chrysler off the hands of its owner, private equity giant Cerberus Capital Management. If GM can come up with funds—perhaps considered in the state of plenteous at the same time that $10 billion—from the government (BusinessWeek.com, 10/28/08) to solve its problems and help restructure the smallest of the Big Three, it could have existence a done give.

Assuming it happens, seem ‘em what they won, Vanna. It’s an 83-year-old car company that’s badly in need of restructuring. That’s the problem. GM has been lousy at restructuring.

GM’s strategy all along has been to grab Chrysler and its $11 billion in cash and estimated $35 billion to $40 billion in yearly sales, and then slash overhead, dump unwanted products and plants, and remake the combined circle into a profitable business. Industry sources say the two sides still have many issues to settle. There’s some agreement on how to resolve them, but ironing out the remaining distinct parts could take a week or more.

You would deliberate GM executives would be good at this sort of thing by at present. The company has decades of experience at it. GM had 215,000 union workers in 1998. After 10 years of demure union workers and buying others out, GM now has about 64,000. But in all of that time, GM has only occasionally made actual circulating medium selling cars in North America.

In the past three years, GM bought out 52,000 workers and bragged that it cut $9 billion in structural costs. But in 2006 and 2007, GM lost near to $2.3 billion in North America on an adjusted basis. That happened in the van of the mayhem of this year’s firing price large nail and credit crunch kicked in. This year’s losses have topped $15 billion.