General Motors' ( GM) hopes of buying Chrysler LLC are floundering because the auto maker remains unable to secure the financing necessary for the deal, the Wall Street Journal reports.

In recent days GM, its lenders, and Chrysler owner Cerberus Capital , have been pitching investors about the transaction. That pitch touts a combined GM-Chrysler as delivering cost savings of up to $10 billion, an immediate boost in revenue and an increase in cash available to the merged firm, according to the Journal.

Outside money is needed to fund the cost-cutting -- especially buyouts and severance packages for hourly and salaried employees. Those cuts could total as much as 40,000 jobs if a deal comes together, the Journal reports, citing people briefed on the talks. GM is already burning more than $1 billion in cash each month.

The United Auto Workers union has publicly questioned the deal but privately is studying its merits.

Several of the potential lenders remain unconvinced, and are fearful of the complexity and scale of combining two industrial giants amid an economic downturn. If investors continue to shun the deal, its proponents could take their case to the U.S. government, arguing that a merger is vital to the survival of the nation's domestic auto industry. But GM, Cerberus and its banks aren't ruling out selling a stake in the new company to the federal government, the newspaper reports.

Cerberus favors a deal with GM. But the private-equity firm is engaged with other parties -- including Nissan Motor/Renault -- about a potential Chrysler deal.

As of late Sunday, a deal wasn't imminent and the two sides had yet to even agree on how the transaction would be structured, according to two people involved in the talks. One of these people described the discussions as "tenuous," according to the Journal.

Meanwhile, Reuters, citing people briefed on the negotiations, reports GM's talks with Cerberus have intensified in recent days and are moving closer toward a conclusion.

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