By the time you read this, General Motors may have already merged with Chrysler.

That's how fast things are moving with GM apparently wanting to nail the deal by the end of the month, according to The New York Times.

It's also a reflection of just how bad things are in the auto industry right now. Indeed, this year has been horrible with high gas prices cutting sales through the first half of the year and the economic slowdown and credit crunch cutting sales in the latter half.

And both Ford CEO Alan Mulally and General Motors COO Fritz Henderson recently said they did not expect the auto market to turn around until 2010.

Could business get any more difficult for the auto makers?

But despite years of cutting costs, General Motors is facing a severe cash shortage.

While it hopes to raise some $15 billion through cost cuts - such as yesterday's announcement that it would be laying off 1,600 workers - and the sale of its Hummer unit, it is also spending about $1 billion in cash every month, according to the NYT.

That's were the merger with Chrysler comes in: The privately-held company has some $11 billion in cash.

But it seems to me that GM is buying time at a time when there are too many variables out there. The run up in gas prices earlier this year prompted all the automakers to focus on small, more fuel efficient cars. Now gas prices are coming down - to $3 a gallon last time I looked at the Cumberland Farms station in Jamestown where I live.

I can't imagine folks are going to go back to buying bigger vehicles because gas prices have come down. But the uncertainty of these times and the volatility of events contrast sharply with the days when GM and the other Detroit manufacturers practically dictated the market, with carefully orchestrated releases of new models year by year.

All gone, along with hats and white gloves.

And it's not as if GM would be buying a gem in Chrysler which was caught with hardly a single small car in its inventory when gas prices started heading toward $4 a gallon. So far this year, Chrysler's sales are off 25 percent.

And then, of course, is the crash in stock markets around the world and the probability of a severe recession with everyone cutting back on spending.

It's hard to see how things could be bleaker and it makes the incredible reports that GM might actually run out of money early next year and be forced to declare bankruptcy seem credible.

PS. I wonder how Chrysler CEO Bob Nardelli will come out of the deal if it goes through. As I mentioned yesterday, he is the amusing character who got a $210 million severance package from Home Depot after that company fired him less than two years ago and before he was tapped to run Chrysler.

- Peter C.T. Elsworth