Shifting Gears at Chrysler

Updated from 11:31 a.m. EST

The controversial 1998 merger that formed DaimlerChrysler (DCX) may be on the verge of coming undone amid dire straits for the U.S. auto industry, adding another wild card to the competitive landscape.

Along with unveiling a broad restructuring plan for its struggling Chrysler Group unit, DaimlerChrysler offered a cryptic statement that appeared to put its Detroit-based business in play, reversing previous indications that the struggling business was not for sale.

"We are looking into further strategic options with partners beyond the business cooperation partners mentioned," said Daimler Chairman Dieter Zetsche. "In this regard, we do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler."

The Detroit News reported on its Web site Wednesday that DaimlerChrysler hired investment bank J.P. Morgan (JPM) to explore strategic options for its Chrysler unit. The report cited unnamed sources.

Last year, the company told investors that Chrysler was not for sale, but Zetsche said Wednesday that the company had been forced to "revisit" that, and Chrysler CEO Tom LaSorda expressed support for the reversal.

The news came as the executives announced a new restructuring plan aims to slash 13,000 jobs at Chrysler over the next two years and shutter plants in North America. DaimlerChrysler hopes the effort will return the U.S. business to profitability by 2008.