Well, the hedge against going short GM is going long Ford. =P
What GM will get is a lifeline, Ford will probly get what they want, a credit line, as doesnt look like they need immediate capital.
GM/Chrysler need money, otherwise they are bankrupt. Not an expert on this, but... if GM buys/merges with Chrysler, they will most likely have to issue equity, which is further dilution.
In any case, there could be a major short trap in the making... remember what happen with Volkswagon? Soo much short interest in there, it doubled? in a day?