Senators grill auto CEOs, eye GM-Chrysler deal

By John Crawley and Kevin Drawbaugh

WASHINGTON (Reuters) - The CEOs of General Motors Corp and Chrysler LLC said they would consider restarting talks about a merger during a nearly six-hour congressional grilling on the industry's pleas for $34 billion in government aid.

The CEOs of GM, Chrysler and Ford Motor Co all promised to refocus their businesses on higher fuel efficiency vehicles and lower production costs as conditions of any federal bailout, and the heads of GM and Chrysler said they would consider a merger if that was also a condition.

"I would be very willing to look at it seriously," GM CEO Rick Wagoner told the Senate Banking Committee, adding that merger talks earlier this year were dropped on concerns GM did not have the financing to merge with Chrysler.

Chrysler CEO Robert Nardelli said his job would likely be the first to go in a merger with GM, but if that would save Chrysler and its workers "I would do it."

The merger idea was pressed by Utah Republican Sen. Robert Bennett and Tennessee Republican Sen. Bob Corker.

"I'd like to see that happen," Corker said. "I hope that's an outcome... our country cannot really deal with three separate automakers."

But United Auto Workers President Ron Gettelfinger questioned claims of cost savings from a merger and told the committee such a deal would bring "unbelievable" job losses.

Shares in both GM and Ford closed lower in a day of broadly bearish trading as Detroit's once mighty Big Three again came hat in hand to Washington with no clear prospect of getting the money they seek. The same CEOs failed to secure federal help two weeks ago in an earlier round of congressional hearings.

They warned again that a steep slump in car sales and sluggish world credit markets are threatening their futures and millions of good-paying jobs.

This time the executives did not fly in on the corporate jets that drew sharp criticism on their last visit.

GM's Wagoner arrived at the Capitol building in a light blue Chevrolet Volt electric prototype, but drove most of the way from Detroit in a Chevrolet Malibu Hybrid. Ford CEO Alan Mulally came in a white Ford Escape Hybrid, and Chrysler's Nardelli arrived in a white EV electric vehicle.

With the government showering a $700 billion bailout fund on distressed banks and Wall Street, there is wide agreement among lawmakers and the Bush administration that the automakers need help too, but deep division about how to go about it.

MORE DEBATE AHEAD

No resolution of the auto aid issue is expected until next week at the earliest, when the full Congress reconvenes.

"We need to sit down over the next 24 to 48 hours and see what we can do to pull something together," said Banking Committee Chairman Christopher Dodd, a Connecticut Democrat.