Sources told the Wall Street Journal that Cerberus Capital Management, which owns 80.1% of Chrysler has proposed trade in their car operations to GM in exchange for GM’s stake in auto lender GMAC Financial Services.
The New York Times sources spoke of a merger was a “50-50” chance, although it could take weeks to complete and has been stalled by the turmoil in financial markets.
GM spokesman Tony Cervone said: “Without making reference to this rumor, as we have often said, GM officials routinely discuss issues of mutual interest with other car manufacturers.”
Analysts have questioned the position of Chrysler, given its dependence on North America for 90% of their income.
Both companies have been hard hit by the drop in truck and SUV sales and are struggling to boost job cuts by the union against the opposition.
GM shares hit a 60-year low this week. It was issued a second quarter net loss of $ 15.5bn.
On the other hand, Reuters reported that Ford plans to sell most of its 33.4% in Japan holding the Mazda.