GM in talks for Chrysler takeover: Reports

DETROIT — The struggling North American vehicle division of DaimlerChrysler AG could be bought by a rival Big Three carmaker, a source close to the situation told media recently.

According to trade journal Automotive News and subsequent media reports, unnamed sources within the German-American company suggested General Motors Corp. is in preliminary “high level” talks to buy Chrysler, which markets Chrysler, Dodge and Jeep vehicles.

A source later told Reuters it was questionable whether GM would want Chrysler’s finance business since it sold its own finance arm last year.

The auto world has been buzzing with rumors since last week when DaimlerChrysler chief executive Dieter Zetsche hinted the company would consider a merger or even selling its North American unit.

The statement came hours after DaimlerChrysler announced a series of massive production cuts and layoffs. The company said 13,000 Chrysler workers would lose their jobs over the next three years, including 2,000 in Canada.

The Canadian job cuts include 1,000 this year and 1,000 in 2008 at the company’s Windsor, Ont. and Brampton, Ont. plants.

According to Reuters reports, some analysts question whether GM would benefit from an outright merger with Chrysler, since both companies are struggling with excess production capacity and increased competition from Asian companies.

The recent speculation comes a few months after GM broke off merger talks with Renault SA and Nissan Motor Co.

Meanwhile, despite rumors that Italian auto company Fiat was also interested in Chrysler, Fiat President and Toronto native Sergio Marchionne told European media he has absolutely “zero Interest” in Chrysler.

— with files from Reuters