GM, Chrysler reportedly talking merger

DETROIT, Oct. 10 (UPI) -- General Motors Corp. and Chrysler LLC are discussing a merger that could reduce the Big Three U.S. automakers to the Big Two, The New York Times said Friday.

Sources close to talks between GM and Cerberus Capital Management told the Times the possibility of the two companies coming together was about 50-50 on Friday. Cerberus is a private equity firm that acquired Chrysler from the German automaker Daimler.

The negotiations have involved senior executives from both sides, the sources said.

The combination of high gas prices and a slumping economy have been difficult for U.S. automakers. Sales of high-profit light trucks and sport utility vehicles have tumbled.

GM, which long dominated the U.S. and world auto industry, is spending its cash reserves. Chrysler, now privately held, does not have to release financial statements.

Cerberus has also begun talks with Nissan, Renault and other automakers, the newspaper said.