At this point it is not clear that GM (NYSE: GM) can get the money to merge with Chrysler. The plan would be to cut 50,000 people. That is a lot of severance. Closing plants and combining product lines cannot be done for free.

Chrysler has figured all of this out and has begun to focus on a partnership with Renault and Nissan, both of which are run by former auto whiz kid Carlos Ghosn. He has been trying to buy into the US market for several years without success. Now, he may have his chance.

If Ghosn can set up a deal where he takes a modest equity stake in Chrysler he may expand his reach into American for a small investment. According to The Wall Street Journal, "Chrysler would have a better chance of keeping much of its operations intact in an alliance with Nissan and Renault than in a merger with GM."

The deal would not really make any sense and may simply be a way to push GM into a merger. While putting Chrysler into a marketing and product development pact with both a Japanese and European car manufacturer, the savings would be modest. Since Chrysler's problems are huge cash losses and falling sales in North American it is hard to see how anything short of an outright merger with large cost cuts does the company any good.

But, there is sense of panic in Detroit which leads to grasping of straws. Panic clouds the mind. Chrysler could do a bad deal because it sees the options as better than no deal at all.

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

This post is part of a series on some of the most memorable companies that have disappeared.

America loves an underdog. And for all its 33 years, American Motors Corporation (AMC) was clearly an underdog.

The American automobile company was formed on January 14, 1954, by the merger of the Nash-Kelvinator Corporation and the Hudson Motor Car Company, in an effort to challenge the "Big Three" automakers -- General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F), and Chrysler. At the time, it was the largest corporate merger in U.S. history, and the new carmaker became the steward of the popular Hudson Hornet and Nash Rambler lines.

After chairman George Romney retired from AMC in 1962 to run for governor of Michigan, the company struggled to come up with a way to compete with such popular "pony cars" such as the Ford Mustang. Sticking with its strengths in fuel economy, AMC introduced the Gremlin in 1970, its most popular car since the Rambler. The AMC Pacer followed in 1975. The Pacer was wider than Gremlin and featured fishbowl windows designed to eliminate blind spots. Unfortunately, it also had a bigger engine, which ran counter to trends during energy crisis of the mid 1970s. Some blame the Pacer's failure to catch on as the reason for the ultimate demise of the company.

Ford Motor Co. (NYSE: F) is cutting production at its Volvo unit, according to The Wall Street Journal. The move, which could affect one-third of workers -- some 700 -- is seen as an attempt to cut the costs and losses at the upscale Swedish brand.

The question everyone is asking is whether this move is done in preparation for a sale. According to "people familiar with the matter" who discussed such things with the Journal, CEO Alan Mulally is interested in putting Volvo, whose sales have been declining, on the block. Of course, to analysts, Mulally sang a different tune last month, saying the priority is improve the Swedish auto maker operations "dramatically."

As Kirk Kerkorian's Tracinda Corp. continues to build its stake int he company, he may also have a thing or two to say on the matter.

For now, Volvo is cutting where it makes larger, less popular vehicles, and it plans to make fewer cars overall. But can this make Volvo more profitable for Ford, or at least more attractive to buyers? There are costs associated with producing a smaller number of vehicles, but with Volvo reporting 22,000 fewer vehicles sold during the first quarter, cutting production makes sense. Another matter Ford has to consider is the massive losses it suffered lately just from the kronor-dollar exchange rate.

Do you like to drive fast Italian cars? If so, you're in luck. In the next few years, you'll probably be able to buy a zippy little Alfa Romeo -- and at a bargain price. Best of all, it will be made right here in the good old USA.

According to The New York Times, Fiat of Italy is considering building a new car factory in the U.S. to produce Alfa Romeo sports cars. Fiat hasn't sold cars here for over a decade, but the falling dollar makes the American market too potentially lucrative to pass up. Fiat believes that locating the factory in the US is the only way it can sell cars here profitably, due to lower labor and transportation costs in North America. The Center for Automotive Research in Michigan recently found that European autoworkers make $10 more an hour than autoworkers in the US.

By most accounts Russia will be the largest car market in Europe sometime within the next five years. General Motors (NYSE: GM) sells about 250,000 vehicles in the market, but is anxious to get a stronger foothold. Things have not worked out.

Several companies have been competing to get a piece of Russian car maker Avtovaz. Yesterday, Renault announced that it would pick up a 25% interest in the company. According to MarketWatch, the European car company will pay $1.25 billion for its stake.

The announcement is a blow to GM, which has to increase its sales overseas. The U.S. car market is slowing and is expected to drop as much as 7% next year. The No.1 U.S. car company also faces increasing domestic competition from Toyota (NYSE: TM) and Honda (NYSE: HMC), so it faces smaller share in a shrinking market.

GM has had real success in China where its is the leader in car sales along with VW. But local car manufacturers want a larger slice of sales there. GM's vehicle business in Europe is mature. That leaves South America, India, and Russia as the largest potential markets.

In October, GM's share price was up 40% for the year. Due to a fear of falling North American sales, it is now down about 8%. It needed the Russia deal.

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

This post is part of our Money Face-Offs feature. Let us know who you think comes out ahead in this head-to-head match-up, and check out our other Money Face-Off posts.

In this corner, hailing from Beverly Hills and Las Vegas, is 91-year old billionaire investor Kirk Kerkorian, one-time amateur boxer know as "Rifle Right Kerkorian." And in the other corner, hailing from New York, is 71-year-old corporate raider and activist private equity investor, Carl Icahn, who is never afraid to go toe to toe with an opponent.

Let's get ready to rumble.

Round One begins: Kerkorian drops out of school and becomes a pilot. He gets his start in business buying surplus planes after World War II, as well as Las Vegas properties, becoming the landlord of Caesar's Palace. Icahn, meanwhile, establishes his reputation as a corporate raider during his hostile takeover of TWA in 1985, and becomes one of the inspirations for the character of Gordon "Greed Is Good" Gekko, the antagonist of the 1987 film Wall Street.

When Carlos Ghosn was brought in seven years ago to try and rescue Nissan Motor Co., Ltd. (ADR) (NASDAQ: NSANY) from the edge of financial death, few would have bet that he could do it. Yet not only has Ghosn turned Nissan around and made the Japanese auto company profitable (for six straight years now), but the company is doing well even in the face of Toyota Motor Corporation (NYSE: TM)'s onslaught in recent years and is flying in the face of failures at General Motors Corporation (NYSE: GM) and Ford Motor Company (NYSE: F). GM did report a very good August U.S. sales month yesterday, which was a surprise.

Ghosn also heads French automaker Renault, and he's bringing in the heavy guns from that operation into Nissan based on slipping profits in 2006. Although Nissan reported a profit for the year, the amount was a fall from previous years, which must have started Ghosn's head spinning. A relentless cost cutter and advocate for building what customers want with a minimum of global manufacturing platforms, Ghosn has signified that a more "French" touch is needed at Nissan. After Nissan lost is CFO in 2003, a new one from Renault will soon be taking the helm at Nissan in order to shore up what can be done to make the Japanese automaker set back on the track to growing profits.

Ghosn is hailed at a hero in Japan after rescuing a company that was headed down the path to extinction before he took over, and by all accounts Nissan is still doing quite well, even with small market losses in both Japan and the U.S. last year. It's never good to lose market share, but the automaker is still very profitable -- so why all the stink? Well, Ghosn probably wants growth in both market share and profits, right? Who wouldn't? The only thing is that competition is more than fierce at this time, and it's not getting anything but more fierce.

Ford Motor (NYSE: F) has definitely been undergoing some serious changes lately. Today came more news of firings for the auto giant with the company announcing that they will be slashing another 2,000 salaried employees.

It was only a couple of weeks ago that Ford said they would be offering buyouts to all of their 75,000 union workers, and today the news is that the company is going to be cutting 2,000 salaried jobs at its financing arm in North America. This move comes as Ford plans to consolidate their current 59 U.S. service centers to six by the end of next year. "As a company with strong business fundamentals, we believe this new structure will further strengthen our operational effectiveness," said Ford Motor Credit CEO Mike Bannister.

Ford is trying everything they can to cut costs and regain lost market share in the U.S. Over the last two and a half years the credit arm has been reduced by nearly 110 branches already throughout the U.S and Canada. The company has already indicated it will sell off Aston Martin, and have been very vocal in the desire to talk with Nissan and Renault should their talks with GM fail (and they look that could be).

With Nissan chief Carlos Ghosn possibly becoming impatient with GM after GM CEO Rick Wagoner reported asked Ghosn to pony up billions for a possible GM-Nissan allaince, could Ghosn move over to Ford?

Possibly -- the enigmatic Ghosn, who has been credited with "saving" Nissan, runs that company along with France's Renault. He's a hot property these days because he knows how to get things done and turn floundering businesses around. Nissan's proof of that beyond any doubts.

Why is Ghosn so eager to make an alliance with a struggling U.S. automaker? Don't think it's coming out of nowhere -- an alliance, if structured properly, would be -- above all -- meant to give great returns to Nissan shareholders above all. Otherwise, why strike an alliance at all?

Bill Ford, Jr., the former CEO of Ford Motor, reported contacted Ghosn a year ago to solicit his interest in possibly running the company, but Ghosn declined. However, Ghosn apparently sees quite a bit of locked-up value in the North American market, some of which he would like to tap into through an alliance. Said Ghosn at the Paris Auto Show, happening this week, "I said from the beginning that the expansion of the alliance in North America makes sense ... there is a lot of value there."

Carlos Ghosn, the CEO of Nissan and Renault, clearly wants to pressure General Motors (NYSE: GM) and its board to create a global alliance with his companies. Having executives talk to the press about the lack of progress in talks seems to be a primary lever.

In the latest example, a key Renault executive is quoted in several newspapers today saying that talks with GM are progressing, but that GM does not understand that it will be crushed by Toyota Motor (NYSE: TM).

But there may be more pressure on Mr. Ghosn than there is on GM. Renault has done fairly well in the market. Its stock is down slightly from early summer, but has still done well over the last year. Nissan is another matter. Its stock is down from its early summer highs, and Toyota may be a real threat to the company.

In Japan, Nissan's home market, its sales were down 12.8% for the first seven months of 2006. Toyota's sales were flat in Japan for the period.

GM, on the other hand, has been able to take $9 billion in annual costs out of the company, and investors are convinced the large US auto company has at least a fighting chance of being competitive in its home market. The market has voted in that direction, driving GM's shares up from a 52-week low of $18.33 to $30.60 -- fairly close to its annual high.

Ghosn is talking, but it appears that no one at GM is listening.

Douglas McIntyre is a partner at 24/7 Wall St.

I came of age in the business climate of the late 80s. You remember, I'm sure, the headlines about Japan buying the entire West Coast. It was like World War II was happening all over again, and this time, we were just handing over our weapons in the guise of the keys to our most precious homegrown businesses.

Now Nissan and Renault are interested in forming an alliance with the venerable U.S. car manufacturer, General Motors, which could include the purchase of up to 20% of GM's shares. What could be worse than the Japanese buying our car companies? Why, the Japanese and the French (but of course).

Perhaps Toyota will become an unlikely knight, says Business Week -- perhaps even offering to purchase GM. One executive near the transaction says that Toyota "has no interest" in any form of alliance between GM and its rivals. Already GM and Toyota work together in California, where Toyota's Corolla, Matrix and Tacoma are assembled alongside GM's Pontiac Vibe.

We're not afraid of the Japanese any more, it seems. Chairman and CEO Richard Wagoner Jr. might even benefit from a takeover by Toyota -- according to some who are familiar with the Renault-Nissan deal, the plans could include replacing Wagoner with Carlos Ghosn, CEO of Nissan and Renault. Other sources, of course, say that Toyota would be unlikely to do anything so aggressive as a takeover bid. Either way, due to a 90-day timeframe set out in the Renault-Nissan-GM alliance announcement, Toyota will have to make a decision quickly or watch as its biggest competitor squeezes it out of the partnership race.