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In what may be the biggest automotive news of the decade, rumors are circling that General Motors Corporation (NYSE: GM) and Ford Motor Company (NYSE: F)have held discussions about a corporate merger.

Most reports say it is highly unlikely (no kidding, you might well say). But I still think it is worth thinking about why it would make sense and why these two rivals would come to the negotiating table in the first place.

For one, merging operations would streamline the entire auto business from head to foot (which is needed with the outmoded and uncompetitive way the business runs for both internally). They would then likely scale down business units and consumer offerings, sharing as much as possible between brands/lines/manufacturing, re-engineering and creating "economies of scale" that don't exist now.

Both GM and Ford have trouble competing with foreign automakers mainly because of their employee and worker pay scenario alone -- a problem competitors do not face and which has caused billions to both GM and Ford. Yes, that's billions with a "b". GM has looked at strategic partnerships before. Carlos Ghosn of Nissan/Renault fame had even talked to GM as recently as this past summer, but nothing developed.

Can GM and Ford both survive as profitable entities without doing a deal to save the day? It is unlikely that a merger of such huge proportions would be an easy sell -- to regulators, to financiers, to customers, to anyone. But I think it is still worth exploring. The "Big 3" U.S. automaker scenario of the 1980s is no longer in existence. Maybe it's time for "The Big One"?

One thing is certain. If the two automakers do merge -- massive restructuring would be seen unlike much of what the business world has witnessed before. This is an industry with hundreds of thousands of employees and huge manufacturing facilities and massive marketing and dealer organizations. That's no easy jigsaw puzzle to assemble.

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