www

Chrysler has elected to suspend talks with Renault and Nissan about a three-way global auto company hook-up that would have saved the American company personnel and production costs. Chrysler will stake its future on a deal with General Motors (NYSE: GM), which means it may have no future at all.

According to The Wall Street Journal (subscription required), Chrysler's controlling shareholder, Cerberus, wants to put all of its energy into the deal it believes is most likely to close.

The decision is hard to understand. GM has indicated that it cannot finish a deal without $10 billion from the Fed to handle worker severance and costs associated with a consolidation of the two companies. It appears that the Administration has turned this down and punted it to the next president.

On paper, the GM deal makes more sense. A buyout would create one U.S. company with about 35% of the American market. A total of 30,000 or 40,000 jobs could be taken out.

What almost every analysts is asking is why Chrysler would tie its future to GM, which could run low on cash itself sometime around the middle of next year.

The answer to the question is simple. No one wants Chrysler except, possibly, GM. The number three U.S. car company is worth more in pieces than as a whole. That would give vultures an opportunity to sift through the wreckage for the best pieces and avoid taking on any of the company's liabilities or a battle with Cerberus over who owns what.

Douglas A. McIntyre is an editor at 247wallst.com.

Get the latest on cars and trucks
from GM and all brands at AOL Autos.