Automakers' merger would face hurdles

DETROIT, Oct. 20 (UPI) -- A proposed merger between U.S. auto giants General Motors and Chrysler would run into high hurdles from regulators, an antitrust attorney said.

The merger would face obstacles from dealerships and unions but would also face scrutiny from either the U.S. Department of Justice's Antitrust Division or the Federal Trade Commission, Ted Bolema, a former Department of Justice attorney told The Detroit News.

"The two companies would control about one-third of the light-vehicle market. That's getting up there in market concentration," said Bolema, who estimated product overlap would mean a regulatory review of about a year.

The companies could argue that the merger would save Chrysler, the News reported.

Unions would certainly fight the merger to protect jobs. White collar staff jobs would also be on the line, a merger analyst said.

"You only need one headquarters, one set of designers and engineers," Van Conway, of consulting firm Conway, MacKenzie & Dunleavy, told the newpsaper.

But, how many car companies are needed? "There is no economic justification for the existence of the Chrysler Corp.," said Gerald Meyers, former chairman of AMC Motors, which was purchased by Chrysler in 1987.

"Whatever Chrysler can do, someone else can do better," he said to the News.