US senators grill auto CEOs, eye GM-Chrysler deal

* GM-Chrysler merger explored

* Questions raised on bailout's cost

* Schumer says doesn't trust auto industry leaders

* CEOs to appear before House committee Friday

* GM shares end down 16 pct, Ford closes 6.7 pct lower

By John Crawley and Kevin Drawbaugh

WASHINGTON (Reuters) - The CEOs of General Motors Corp (GM.N) and Chrysler LLC said they would consider restarting talks about a merger during a nearly six-hour congressional grilling on the industry's pleas for $34 billion in government aid.

The CEOs of GM, Chrysler and Ford Motor Co (F.N) all promised to refocus their businesses on higher fuel efficiency vehicles and lower production costs as conditions of any federal bailout, and the heads of GM and Chrysler said they would consider a merger if that was also a condition.

"I would be very willing to look at it seriously," GM CEO Rick Wagoner told the Senate Banking Committee, adding that merger talks earlier this year were dropped on concerns GM did not have the financing to merge with Chrysler.  Continued...