US Treasury working on aid for GM, Chrysler merger

WASHINGTON, Oct 27 (Reuters) - The U.S. Treasury Department is considering how to best provide financial assistance to facilitate a possible merger between General Motors Corp GM.N and Chrysler LLC, a source familiar with the government's thinking told Reuters on Monday.

The Treasury Department is considering aid of at least $5 billion, which could include direct capital injections and government purchases of auto loans, the source said, speaking on condition of anonymity. A decision on the government aid could come as early as this week, the source said.

GM has been lobbying the Bush administration for substantial help as it seeks to merge with Chrysler, which is owned by Cerberus Capital Management [CBS.UL]. Federal aid is considered a requirement for completing the deal, people familiar with the talks have said. (Reporting by Karey Wutkowski, with additional reporting by John Crawley, Rachelle Younglai and Patrick Rucker)