GM Europe labor opposes Chrysler merger

FRANKFURT (Reuters) - A merger between U.S. carmakers General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) and Chrysler would be "an absolute catastrophe," the top labor representative at GM Europe was quoted on Monday as saying.

"GM would only raise its own problems to a higher power. Chrysler has nothing that GM does not have already," Klaus Franz told the Handelsblatt newspaper in comments released before publication on Tuesday.

"(Combining) two people with bad feet does not create a marathon runner, and with Cerberus there would be a third sick person on board," he added, referring to Chrysler's majority owner, Cerberus Capital Management LP CBS.UL.

Cerberus has been in talks with GM about swapping Chrysler's auto operations for GM's 49 percent stake in finance arm GMAC, sources briefed on the matter have told Reuters. Cerberus owns the other 51 percent in GMAC.

GM has had preliminary talks with both Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler about the potential for mergers, people familiar with the talks have said, as the punishing downturn in auto sales forces all three companies to rethink their businesses.

GM's talks with Ford broke off and Chrysler's negotiations got hung up on the question of how much value the automaker had lost while owned by private equity fund Cerberus Capital.

Cerberus last year bought an 81 percent stake in Chrysler from Daimler AG (DAIGn.DE: Quote, Profile, Research, Stock Buzz) and is in talks with the German automaker about buying the rest.

(Reporting by Michael Shields; Editing by David Holmes)