New GM is making a lot of profit, Chrysler was doing great before Diamler came along and took all the cash, gutted the company, and left it for dead.
If FIAT didn't have Chrysler they may have gone bankrupt by now too. Things have been bad in Europe.
Sergio's claim is that the development costs of common parts are increasing (engines, powertrains, etc.) such that only the large companies that can spread these costs over a large number of platforms will survive. He believes that only 5 or 6 (IIRC) companies will be around in the future, which is his reason for a merger.