GM and Chrysler

NEW YORK, Feb 16, 2007 (AFP) - General Motors is in talks to buy all of its struggling rival Chrysler Group from German-US auto giant DaimlerChrysler AG, Automotive News said Friday.
The weekly trade publication cited sources in Germany and the United States, two days after Germany's Manager Magazin reported the same discussions taking place. DaimlerChrysler said Wednesday it planned to axe 13,000 jobs at its loss-making Chrysler subsidiary as part of a broad restructuring plan aimed at returning the US unit to profitability by 2008. DaimlerChrysler chairman Dieter Zetsche said that he was reviewing "further strategic options" for Chrysler and did not rule out the sale of the subsidiary, a move shareholders in Germany have been advocating. GM is also undergoing a painful restructuring in a bid to overcome hefty losses, both to its bottom line and to its market share. Automotive News said: "High-level talks are taking place between DaimlerChrysler AG and GM executives. "Although the two companies have discussed cooperation on a large SUV (sport utility vehicle), say sources at both companies, the potential deal would go beyond limited product development alliances," it said. Spokesmen at both companies declined to confirm the latest speculation when contacted by AFP. "We talk to companies all the time," GM spokesman Tom Wilkinson said. Chrysler, a company created in 1925, was bought in 1998 by the Germany auto and aerospace group in a deal worth 92 billion dollars, described at the time as the largest industrial merger in corporate history. But analysts say the German parent seems ready to give up on its dream of creating a global player and focus on its domestic markets instead, and the profitable luxury brand Mercedes-Benz in particular. jit-bur/rl Germany-US-auto-divest-company-GM-DaimlerChrysler AFP 161735 GMT 02 07
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