RTFA: http://www.nytimes.com/2008/10/12/business/12auto….

DETROIT – Before General Motors began exploring a possible merger with Chrysler – talks that first came to light on Friday – G. M. proposed a similar deal with its other cross-town rival, the Ford Motor Company, two people with knowledge of the talks said Saturday.

G. M. executives approached Ford about a possible merger in July, but Ford rejected the idea and ended the discussions last month, these people said.

After Ford decided to remain independent amid an increasingly difficult auto market, G. M. turned its attention to Chrysler. For the last month, it has been in preliminary merger talks with Chrysler’s owner, the private-equity firm Cerberus Capital Management.

People with knowledge of the talks described the chances of a deal as “50-50.”

A healthy round of consolidation… right?

A question: why not just bail them out like everything else, and let them continue making oversized, unwanted gas-guzzlers for a few more years? That’s basically what an overpriced house is, too: not worth the price paid for it, and too expensive to sell for a profit.