Report Says GM Considering Linking With Chrysler

The Süddeutsche Zeitung said such an alliance would be modeled on that between Renault of France and Nissan of Japan. The French company owns about one third of Nissan. The newspaper said exploratory talks between Chrysler and GM had begun.

Quoting automotive-industry sources, it said it was unlikely that GM, the world's biggest carmaker, would take over the US subsidiary of DaimlerChrysler outright. Both companies have declined comment on the speculation.

"We often have discussions with automakers routinely," GM spokesman Tony Cervone told Reuters news agency. "We don't comment on speculation regarding discussions."

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An alliance would mean GM and Chrysler remain separate companies, but keeps open the possibility of cross-shareholding and the ability to act as a single company in product development, production and sales, the German daily said.

Chrysler chief executive Tom LaSorda said he wants to more than double global sales through new alliances, The Wall Street Journal reported Friday.

Advantages for both companies

The initiative for the talks had come from Chrysler. Sources familiar with the talks said that if a link-up were to be to GM's advantage, the US group would contemplate such an arrangement.

Speculation since mid-week has driven DaimlerChrysler stock higher this week, making it the top stock in Frankfurt's DAX index for three straight days. Despite profit taking Friday, it closed 1.3 percent higher at 54.12 euros ($72.45).

Chrysler is struggling with a slump in profitability as Americans turn away from its range of big cars and favor imports. The German arm of DaimlerChrysler, Mercedes, is in relatively healthy condition.

DaimlerChrysler's chief executive Dieter Zetsche said he was reviewing "further strategic options" for Chrysler and not ruling out any possibilities for the US carmaker's future at an annual conference held on Wednesday.

Automotive News Europe had earlier reported top-level talks on an outright merger, but the Süddeutsche Zeitung said GM had too many problems of its own and would not want to bring another struggling company on board.