GM, Chrysler talk about possible alliance

updated 9:35 a.m. ET Feb. 16, 2007

AUBURN HILLS, Mich. - DaimlerChrysler AG's Chrysler Group and General Motors Corp. have held discussions for about six months about a possible alliance related to large sport utility vehicles, according to newspaper reports Friday.

The Wall Street Journal, citing people familiar with the matter that it didn't name, said the automakers had preliminary discussions to jointly develop a large SUV such as the Chevrolet Suburban, which Chrysler doesn't have in its lineup.

The New York Times, citing people with direct knowledge of the talks that it didn't name, said the companies are holding discussions about a project that would provide Chrysler with a version of the Chevrolet Tahoe large SUV.

GM and Chrysler also are looking at sharing small cars developed by GM Daewoo Auto & Technology, a unit of GM in South Korea that builds the Chevrolet Aveo compact car for GM, the Journal reported.

The automakers have declined to comment on reports of talks.

Chrysler already has alliances with GM, including one to develop gasoline-electric hybrid engine technology.

THE CHRYSLER RESTRUCTURING Chrysler announces massive layoffs Analysis: Automaker must change focus Workers resolute in face of layoffs news Vote: Why are automakers in trouble?   Discuss how they can turn it around   Video: Will this fix Chrysler's problems? Timeline: Auto industry in turmoil

Last year, GM was in talks with Nissan Motor Co. and Renault SA on creating an automaking alliance, but those were called off in October. Those talks have nothing to do with the Chrysler talks, the Times reported.

DaimlerChrysler said Wednesday in announcing its restructuring that it was exploring all options for Chrysler, including strategic partners. DaimlerChrysler Chairman Dieter Zetsche would not rule out selling the troubled U.S. operation.

On Thursday, Chrysler Chief Executive Tom LaSorda told the Journal in an interview that he hopes uncertainty about whether Chrysler will remain part of the German automaker is resolved "sooner rather than later."

As part of the restructuring, Chrysler plans to eliminate 13,000 positions, including 11,000 production jobs and 2,000 white-collar posts, as it seeks to cut costs and return to profitability in 2008.

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