Report: GM in talks to buy Chrysler Group

Analysts question the advantage to a GM-Chrysler merger.
DETROIT (AP) -- U.S. shares of DaimlerChrysler AG jumped more than 4 percent Friday after a trade publication reported that General Motors Corp. is in talks to acquire the troubled Chrysler Group.
GM and Chrysler officials would not comment on the report by Automotive News, which attributed the story to people in Germany and the U.S. whom it did not identify.
Several industry analysts said the speculation drove DaimlerChrysler stock up. Its shares closed up 3.08, or 4.4 percent, to 73.33 on the New York Stock Exchange. Earlier in the session, it set a new 52-week high of 74.53.
GM's shares slipped 10 cents to 36.34, after rising earlier to 36.83.
Spokesmen for both GM and Chrysler said they would not comment because so many rumors have surfaced since Wednesday, when DaimlerChrysler Chairman Dieter Zetsche said the automaker would not rule out possible sale of its U.S. operations, which it acquired in 1998.
The DaimlerChrysler chairman, who formerly led Chrysler Group, said the German company is considering all options for its U.S. operation, including strategic partners.
"It's the rumor of the day, or the week," Chrysler Group spokesman Mike Aberlich said of the GM report. "It's just speculation and we're not going to comment on speculation."
But neither company would deny that talks were taking place, either.
"We've said on many occasions that conversations throughout the auto industry happen all the time," said GM spokesman Tony Cervone. "And those conversations very often lead to nothing."
See few advantages
Several analysts said that neither company would gain much if GM acquired Chrysler.
"It doesn't make any sense to me at the corporate level," said Burnham Securities analyst David Healy. "They have competitive vehicles with dealers across the street at every level from subcompact car at least to full-size pickup truck."
Healy and others said it's more likely the two companies would join to develop technologies or hardware such as a clean diesel engine built at a single plant.
"I think there's some fire with all that smoke," he said. "With the Chrysler Group losing money and looking for alternatives to save development costs, joint ventures, technology sharing with GM and some of the other auto companies might make a lot of sense."
The Wall Street Journal and The New York Times on Friday both quoted sources as saying that Chrysler and GM have discussed a possible alliance related to large sport-utility vehicles.
DaimlerChrysler already has intertwined its Mercedes operation with Chrysler to the point where it would be difficult for the companies to separate, said Kevin Reale, an AMR Research Inc. automotive analyst.
"If you stand back and look at the monies and whatnot that DaimlerChrysler is investing in Chrysler overall, and the level of reuse in architecture and parts you're seeing, I find it very difficult for it to be more than just a rumor right now," Reale said.