Chrysler Says GM Tie-Up 'Best Option': Report

The U.S. automaker said a partnership with General Motors is still the best option for the ailing auto industry, a report says.
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Publish date:

Updated from 12:55 a.m. EST

U.S. automaker

Chrysler

, which is pushing forward with an alliance with Italian automaker

Fiat

, said it believes a partnership with

General Motors

(GM) - Get Report

is still the "best option for the U.S. auto industry," according to the

Detroit Free Press

.

The comments were made in Chrysler's restructuring plan filed earlier this week with the Obama administration.

The automaker, which so far has received $4 billion in federal loans, details its restructuring efforts in the plan, which include the elimination of 3,000 jobs and three vehicle models, as well as its request for $5 billion more in federal loans.

But Chrysler's plan also points to consolidation among U.S. automakers as a way to sustain the industry, the newspaper reports.

GM, which received $13.4 billion in federal loans, didn't express the same sentiment in the restructuring plan it filed.

Sen. Bob Corker (R-Tenn.), who has been a critic of the U.S. auto industry, said it is clear that Chrysler's best option is to partner with another automaker.

"Whether it's with Fiat, or whether it makes sense to talk about GM, a merger is their best chance for survival," he said in an interview with the

Detroit Free Press

.

Chrysler has said that talks about such a partnership, which heated up last fall before the two automakers approached Congress for aid, were taken off the table by GM.

Chrysler hints at a "strong need for industry consolidation, as it notes a merger with GM would create more value than a standalone Chrysler or Fiat alliance," Barclays Capital analyst Brian Johnson said in a note to investors, the newspaper reports.

As GM and Chrysler approach the government for more money, decisions about their future might not be in their hands alone. Johnson said he expects government aid will continue, "with perhaps the condition of a merger of Chrysler into GM," the

Detroit Free Press

reports.

This article was written by a staff member of TheStreet.com.