GM May Swoop for Chrysler Brand

Today's reports that General Motors Corp. is in talks to buy Chrysler have put Wall Street and Detroit on notice. In an age when the American auto industry is fighting its way back from financial collapse, anything is possible.

Editors at the auto trade publication Automotive News told ABC News that sources have confirmed that talks between the two automotive giants have occurred at the highest levels of management, and that more discussions are scheduled.

Both companies are declining to comment on the report, but even the hint of a major corporate marriage sent shivers through shares of both companies.

Since the story broke, DaimlerChrysler has remained up by about 4 percent. Chrysler is still up more than 4 percent. Investors see the potential for a deal as a clear positive for DaimlerChrysler shareholders and a negative for GM investors.

But many analysts are skeptical a deal will happen. "I doubt it's for real," said veteran auto analyst John Casesa, who predicted it would take a "bloodbath" in job cuts and plant closings to make the deal pay for GM.

"It makes no sense at all," said Csaba Cetta, editor of Car and Driver magazine. "GM has been trying to cut capacity. The last thing it needs to do is buy another company with excess capacity." Especially one with the same kind of legacy costs GM is now trying to shed.

On Valentine's Day, DaimlerChrysler announced a turnaround plan for its North American operations.

The plan calls for cutting 13,000 workers from the payroll and shuttering or slowing three plants around the country in the next three years. Company management said it has to cut extra production capacity to reduce costs and return to profitability.

Top managers at DaimlerChrysler told reporters at the announcement that they are considering all options, including a sale of the troubled Chrysler brand.