Car manufacturer denies merger talks

US car manufacturer General Motors has dismissed a report that it and Chrysler have restarted merger talks.

The Wall Street Journal said talks started up again after Cerberus Capital Management, the majority owner of Chrysler, indicated it would be willing to give up some of its stake in the manufacturer.

Previous merger discussions between the car giants broke down amid disagreements over financing.

The report comes as the Bush administration considers ways to assist GM and Chrysler after Congress failed in its bid to secure a $14 billion (£9 billion) loan deal for the firms.

Funding for the loans is expected to come from the $700 billion (£450 billion) Wall Street rescue fund, but many Republicans have objected.

GM and Chrysler, as well as Ford, have been taking dramatic steps to survive the recession and US sales that have dipped to their slowest rate in 26 years.

A GM spokesman said the company's stance on the merger talks had not changed since it suspended them when it announced third-quarter earnings in November.

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