DaimlerChysler has hired JPMorgan to conduct a review of its Chrysler business, in a move that could lead to the German carmaker offloading its Detroit-based offshoot.

The German group is understood to be considering plans to spin off Chrysler in what would be a dramatic unravelling of the transatlantic merger it completed nine years ago.

The group said yesterday that it was considering all options for its loss-making US arm, which is believed to be worth about €10 billion (£6.7 billion).

Dieter Zetsche, DaimlerChrysler chief executive, put the future of Chrysler on the line as the carmaker announced 13,000 job losses in the US and Canada and the closure of an assembly plant and a parts business.

The job cuts amount to 16 per cent of the global workforce after Chrysler plunged last year to a €1.1 billion loss from a profit of €1.5 billion in 2005.

The company said that it had begun talks with partners about the future of Chrysler.

Mr Zetsche said: “In this regard we do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler.”

The carmaker has hired JPMorgan for advice.

It has been reported that early talks had started with General Motors, with analysts believing that a stake sale could be the most likely route.

American private equity groups are also believed to be interested.

Philip Watkins, an analyst with Commerzbank, believes that Chrysler could have an enterprise value of €10 billion and that the group would have to sell at least 25 per cent.

Ron Gettelfinger, the president of the United Auto Workers, said: “Today’s action by DaimlerChrysler is devastating news for thousands of workers, their families and their communities.”

Mr Gettelfinger said that the union would do all it could to ensure that those members dismissed in the latest cuts would receive a fair severance package.

The uncertainty over Chrysler comes after the group gave an assurance in October that it was not for sale.

Mr Zetsche said: “At that time, there were no other options for the group and, therefore, at that time we had to stop speculation.”

The restructuring plan for Chrysler involves closing the assembly plant in Newark, Delaware, and a parts distributor near Cleveland, Ohio, and cutting back shifts in other plants.

A separation of Chrysler from its German parent would mark the end of a merger that has been dogged by controversy, including shareholder challenges and the dismissal of the former chief executive over quality concerns at Mercedes.

Mr Watkins said that selling a stake to GM could make sense because it would reduce competition in the tough North American market.

But some Wall Street bankers are more optimistic that Chrysler will remain in the merger and recover with a new range of models.

DaimlerChrysler’s profits edged up to €5.5 billion, from €5.2 billion the previous year, after a good performance in Germany.

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