The US car industry resembles a game of musical chairs with the song about to stop. Already running round in circles, it looked earlier this year as if big reductions in overheads had bought Detroit's Big Three time to emerge in 2010 as smaller, leaner companies. But the tune has now changed. A plunge in sales amid the credit freeze has put Chrysler, controlled by private equity firm Cerberus, into play. A deal may be weeks away. Chrysler's preferred suitor, General Motors, also does not have the luxury of time. With the credit crunch possibly pushing annualised US car sales to multi-decade lows, GM could burn through enough cash to breach minimum working capital levels by next spring.

Existing plans for raising $15bn, which include selling Hummer, now appear unrealistic, which is why it covets Chrysler's $11bn cash pile. A deal could save billions more in the long run but it would also have high upfront costs for redundancies and dealer compensation. Banks, the government, Cerberus or some combination of the three would have to stump up cash to make a deal fly.