GM thinks it could pare down Chrysler's lineup by eliminating redundant cars. At the same time, GM considers Chrysler's minivans a strong product line. And one executive remarked that Jeep has the highest loyalty rate among Chrysler's brands. GM could use the Wrangler platform to make a Hummer H4, a concept car that GM wants to build but hasn't because the company doesn't have a platform.

Chrysler's midsize Sebring and Avenger sedans could be built using GM's global midsize car platform on which the Opel Vectra, Chevrolet Malibu, and Saturn Aura are now based. That would give Chrysler something it lacks, something Daimler's Mercedes-Benz division could never give it: global sales volume and purchasing power.

There are many benefits, according to GM insiders. But big problems, too. In addition to union retiree costs, Chrysler's sales strategy of discounting cars and selling cheap vehicles to rental fleets has flooded the market with cars. Some GM executives think the worst is yet to come. Chrysler will have to keep pulling back production while dealers sell through the excess inventory. "They have really oversupplied the market," says one GM insider. "The cost of that is still ahead of them."

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In other words, GM has its eyes open to the pitfalls of buying Chrysler. "I can see GM looking at getting Chrysler at a price you can't refuse," Cole says. Daimler may even be willing to give up Chrysler at such a price. But getting the union and dealers to make it an easy acquisition to swallow may be much harder to do.

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