The WSJ is reporting that the merger talks between GM and Chrysler are heating up with Jamie Dimon providing the heat:

General Motors Corp. and Chrysler LLC are accelerating merger discussions amid strong support from potential lenders that are eager to see a deal done.

GM, set to report dismal third-quarter earnings in coming weeks and scrambling to find new sources of funding, is aiming to get a deal done as early as the end of October, according to people familiar with the matter.

Two major players driving the deal are J.P. Morgan Chase & Co. and Cerberus Capital Management. Cerberus owns Chrysler, while J.P. Morgan is one of the largest holders of Chrysler bank debt and a key lender for GM.

I don’t blame Dimon; if GM or Chrysler end up in bankruptcy, JPM, as a creditor, will end up owning them. And that can’t be a happy prospect on the eve of a recession. Better to merge them and hope the combined company can be downsized and saved. Pretty smart move on Dimon’s part if he can pull it off.

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