Chrysler considering merger, but nothing signed yet

Following a number of weekend reports claiming Chrysler could be sold to General Motors comes the first official confirmation from its CEO that major structural reforms are being considered at the Auburn Hills carmaker. Bob Nardelli told employees in a memo today that Chrysler has been in negotiations with other parties "interested in exploring future possibilities” but said no final decision has been made.

Nardelli stated Chrysler is evaluating “strategic options to maximize core operations and leverage its assets,” and that the best interests of employees, dealers, suppliers and customers will be kept in mind. Company executives, wishing to remain anonymous, have been quick to point out that any decision is weeks or months away, at best. Nardelli himself wrote in the memo, "It's important for you to know that beyond those partnerships already announced, Chrysler has not formed any new agreements and has no announcements to make at this time."

An inside source revealed late Friday that GM had contacted Chrysler’s current owner Cerberus Capital Management about trading its remaining stake in auto-lending firm GMAC for Chrysler, however recent turmoil brought about by America’s credit crisis lead to a breakdown in the talks.

Speaking with The Detroit News, another inside source revealed that there were “numerous” other options in addition to the talks with GM. Renault-Nissan is claimed to be in regular contact with Chrysler as well - especially now that it has signed a platform sharing deal with Chrysler - and is apparently considering a possible U.S. production deal.

It's not clear what GM would gain from acquiring or merging with Chrysler, since much of the two companies' product lines are duplicative, with both lineups skewed too heavily toward the SUV and pickup truck sector, though plans to change that are already in play. At any rate, a merger will do little or nothing to help turn around slow sales for either company, since the economy is the larger determining factor in that problem.