Carl Levin: Fed could aid a merger Chrysler and GM

Levin: Fed could aid a merger
Senator says that if a Chrysler pairing with another carmaker needs help, it should be offered.
Deb Price and Gordon Trowbridge / Detroit News Washington Bureau
DETROIT -- Sen. Carl Levin on Monday suggested that the federal government may have a role in helping Chrysler complete a merger.

"If they need support to make some kind of a merger between Chrysler and another auto company happen, we clearly ought to do that," Levin said during a debate with state Rep. Jack Hoogendyk, his opponent in Michigan's U.S. Senate race. "No other country in the world would stand by and watch major corporations go under this way without trying to do something about it."

Levin would not discuss what form federal involvement might take. "I don't have anything specific I want to talk about at this point," he said. "There may be ways (to help a merger) ... but I better leave it at that."

Levin acknowledged that a merger could eliminate jobs, but he suggested that failure by one of the domestic car makers could hurt the state even more.

Liz Boyd, press secretary to Gov. Jennifer Granholm, said the governor "is focused on reports of a merger and the impact it could have on the state's economy. While most mergers represent job loss, mergers can also offer opportunities for consolidation of operations and that could be positive for Michigan."

U.S. Rep. Thaddeus McCotter, R-Livonia said, "we want to preserve the most jobs possible. Does a merger do that?"

He said it's unclear whether more jobs would be lost in a merger rather than Cerberus selling off parts. Either way, he said, the federal government needs to step in with additional job training, extension of unemployment benefits and similar aid to help the state and localities cope with additional job losses.

"We need to be prepared to help the people that may be losing their jobs. ... You have a lot of people very worried about their jobs. Democrats or Republicans, we are all in the same boat. We need to do what we can to help."

U.S. Rep. Pete Hoekstra, R-Holland, said he's not convinced that a merger would make one stronger company out of two struggling ones because of unresolved problems.

"They have structural fundamental weaknesses that have made it difficult if not impossible for them to survive on their own. Putting the two of them together doesn't fundamentally change that dynamic, if they are not willing to do the things needed to survive separately. Even if they merge, they would still have problems with legacy costs, with their product mix, and the like."

Hoekstra said if the companies merge, expect the new entity to announce "merger savings," the buzz word for job cuts. He's also concerned about Chrysler and GM dealerships in his district.

"If you had two auto companies go out of business, well obviously you'd rather have one that survives. But it would be a painful transition for a state like Michigan. They'd be a lot of merger savings. That is a kind way of saying there would be lots of people losing their jobs."

But U.S. Rep. Mike Rogers, R-Brighton, said that he could see a stronger combined company emerging through savings in parts production, purchasing, and research and development.

"I'm concerned about how they do it. But I am cautiously optimistic. Like everybody else, I would love to see the details. We are all concerned and want the best outcome for workers."

U.S. Rep. Joe Knollenberg, R-Bloomfield Hills, said, "I'm watching this situation very closely. Lots of Michigan autoworkers, and their families, hang in the balance."



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