Chrysler in talks with GM on SUV project

Mumbai: DaimlerChrysler AG''s Chrysler group is in talks with General Motors Corporation on a joint project, possibly a version of the Chevrolet Tahoe SUV, reports quoting industry sources said.

The New York Times and the Wall Street Journal have both reported that that talks between the two Detroit carmakers are under way and that an alliance between the two was possible.

While a deeper alliance between the two Detroit carmakers is unlikely now, there are possibilities that the two may find synergy on specific vehicle models. Talks between the two companies have been going on for about six months, according to some sources.

The report, however, said a possible GM-Chrysler alliance based on specific vehicles such as the Chevrolet Suburban, which Chrysler doesn''t have in its lineup, could develop into something deeper.

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 report said.

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

DaimlerChrysler while announcing restructuring plans for Chrysler, had said it was exploring all options for Chrysler, including strategic partners.

As part of the restructuring and cost reduction, Chrysler plans to reduce 13,000 workers, including 11,000 on production jobs and 2,000 white-collar posts, and return to profitability in 2008.

The report did not give any details of the talks, nor did it say when the two companies might reach a conclusion