Should we care that General Motors and Chrysler are hanging by threads? They’ve been given just a month (Chrysler) and 60 days (GM) by Barack Obama and his hard-charging automotive task force to shape up or face bankruptcy.

Darn right we should care.

Aside from the fact that news of CEO Rick Wagoner’s ouster sent Wall Street into a tailspin, there’s the fact that GM employs a stunning 243,000 people. That’s a lot of jobs. "And if you include jobs related by the auto industry, it's in the millions," says GM spokesman Brian Corbett.

The companies are going to have to rethink themselves radically, emerging as much smaller and much greener than they are now. The Obama auto task force is unlikely to accept anything less.

But whether GM declares bankruptcy or not, some form of it will survive.  Right now, cash is so tight that the company is keeping a light burning in the window on only a few projects, including “priority number one,” the Chevy Volt, whose tiny gas engine is just there to supply juice to the onboard electric motor. “Everything is on track,” said Corbett. “They’re hitting all the bogeys and the battery is looking good.”

Over at Chrysler, all product development has screeched to a halt, and the company’s last chance is to merge with Italy’s Fiat, which will then own 35 percent of the company. That merger would give Americans access to a suite of really fuel-efficient small cars, some of which could do well here, especially if gas prices do what McKinsey and Company is predicting and go back up to $4 a gallon. And Chrysler, too, has a fleet of electric cars that it says it wants to launch, including the really appealing Dodge Circuit (based on a Lotus design).

By late Monday Chrysler was saying that it had reached a “possible business framework” with Fiat, but “substantial hurdles” remained before a handshake could seal the deal.

When this film was created for Chevrolet in the early 50s, GM had half of the U.S. auto market. Is that Dinah Shore?

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