US media reports suggest General Motors (GM) and Chrysler are in talks over a possible merger or acquisition.

A Wall Street Journal source claims that Cerberus Capital Management, which owns an 80.1 per cent stake in Chrysler, has raised the possibility of selling the company's automotive operations to GM in return for GM's shareholding in GMAC Financial Services.

Meanwhile, sources for the New York Times suggest talks are more likely to result in a merger between the two firms.

Tony Cervone, a spokesperson for GM, refused to be drawn on whether a merger or acquisition was on the cards, but failed to deny that talks had taken place.

"Without referencing this specific rumour, as we've often said, GM officials routinely discuss issues of mutual interest with other automakers," he commented.

The move comes as GM and Chrysler, the US' largest and third-largest car manufacturers respectively, attempt to navigate their way through tough market conditions which have seen US sales fall to 15-year lows.

Sources:
GM and Chrysler 'in merger talks', 11/10/08
http://news.bbc.co.uk/1/hi/business/7664866.stm
GM Had Talks With Chrysler, 11/10/08
http://online.wsj.com/article/SB122367931927624611.html?mod=googlenews_wsj
G.M. and Chrysler Explore Merger, 10/10/08
http://www.nytimes.com/2008/10/11/business/11auto.html?partner=rssnyt&emc=rss