AUTOSHOW-UPDATE 3-Sen. Corker hopes Chrysler will merge

(Adds Corker'S GM and UAW comments)

By Poornima Gupta and David Bailey

DETROIT, Jan 13 (Reuters) - Tennessee Sen. Bob Corker, who pushed for tough conditions on the U.S. government bailout for automakers, said on Tuesday he hoped that Chrysler LLC would merge to become a viable company.

Corker, who was touring the Detroit auto show and scheduled to meet with U.S. auto executives, also said he was concerned that General Motors GM.N might not meet the aggressive restructuring targets set out under the $13.4 billion loan granted to the automaker by the Bush administration.

"Chrysler probably needs to merge with somebody, not necessarily disappear from the standpoint of existence," said Corker, who added the automaker owned by Cerberus Capital Management [CBS.UL] was not making the needed investment to remain competitive.

A Republican whose home state includes auto supply operations and the North American headquarters of Japan's Nissan Motor Co. (7201.T: Quote, Profile, Research), Corker said he was concerned that the auto restructuring could be losing steam.

"I do think that we lost a little bit of a sense of urgency," Corker said, attributing it to a lack of legislative mandate for the restructuring targets on GM and Chrysler and uncertainty about the intentions of the Obama administration and the naming of a car czar.

Corker met with GM President and Chief Operating Officer Fritz Henderson before touring the auto show floor. He looked at several vehicles at GM, Ford Motor Co (F.N: Quote, Profile, Research), Chrysler and Volkswagen, guided by representatives from each company.

Henderson told Corker that GM had begun discussions with bondholders and the United Auto Workers union, the senator said. It was important to see "shared sacrifice in those talks," the senator said.