As the Senate committee hearing on aid to the auto industry continued for the second day, the possibility of a merger between General Motors and Chrysler came up again and some Senators suggested that a merger would be a pre condition to receiving a tax payers money.

The merger of GM and Chrysler faded into darkness when it became clear to GM that it could not raise the finance from the credit markets to get the deal done as well as stiff opposition to the merger from United Auto Workers union and the governments refusal to give it $10 billion in government loans to let the deal go through.

During the Senate committee hearing, when Chrysler CEO, Bob Nardelli and CEO of GM, Rick Wagoner were asked as to whether they would consider a merger in order to receive aid, Nardelli said he would back the merger with GM if it was a condition for getting aid while Wagoner said he would reconsider the merger, only if the United Auto Workers union supported it.

The UAW had opposed the merger on the grounds that it would cost tens of thousands of workers to lose their jobs.

"It would be unbelievable the number of people who would lose their jobs," said UAW president, Ron Gettelfinger at Thursday's hearing.

However, Nardelli said that a merger could save the merged company $8 billion to $10 billion a year, since it would also merge their white-collar employees as also its manufacturing operations.

Nardelli noted that he was willing to merge even if it cost him his job as Wagoner would possibly head the new company and added, "If merger is the criteria that means we get money to save Chrysler, I would do it."

Senator Robert Bennett said a merger made sense if it would save as much as $10 billion a year and asked both the CEO's if they would consider a merger as a condition to getting aid, both of them answered in the affirmative.

"I'd be very willing to look at it seriously," GM's Rick Wagoner said.

Senator Bob Corker, said he thought merger was a good idea, but he was not for forcing the deal, "I'd like to see that happen, our country cannot really deal with three separate automakers."

He also criticised Chrysler's owners as he felt that their motives were not clean in asking for the aid and seemed to be just buying time to merge. "There's not a human being alive in the automotive world that thinks Chrysler is doing anything but hanging around long enough" to merge with another company.

"It troubles me a little bit knowing that basically all we're really doing is providing a little capital for y'all to hang around long enough to get married," Corker said.

"I can assure you, Senator that I don't wake up every morning thinking about how to sell the company. We're busting our guts, and the people who are left there are busting their guts to make this thing work," said Nardelli.

Corker said, "But there's no future for the company as a stand-alone, is that correct?"

Nardelli replied, "I don't agree with that, sir, or I wouldn't have been here."

Corker said that a Cerberus board member had told him that it would not invest any money in Chrysler, "What the board member said to me is that there is no way they would make additional investments in the automobile industry this time and here we are as a public entity being asked to do that."

Private equity firm Cerberus bought 80 per cent from Daimler for $7.4 billion in 2007 and Daimler's remaining 20 per cent stake in Chrysler is part of the problem today, Nardelli said.

According to Nardelli, Daimler left Chrysler a "hollow shell of a company that had been starved of product" by the time Cerberus bought it.