General Motors (GM) and privately-held Chrysler, two of the most iconic names in American industry, have held preliminary talks about a possible merger, according to The Wall Street Journal. The paper said that those talks have been put on hold due to the crisis in the financial markets, but if the situation stabilizes they could start up again because both parties may want to move assets quickly.

Separately, Barron's reported on Sunday night that GM would likely seek a loan from the Federal Reserve's discount window.

Private equity firm Cerberus Capital Management owns Chrysler, as well as 51% of financing company GMAC. The Journal reported that Cerberus proposed selling GM all of Chrysler's automotive operations, in exchange for GM selling Cerberus its remaining 49% stake in GMAC. 

According to the Journal, GM believes it could save as much as $10 billion in costs with a merger with Chrysler.

There are a multitude of logistical, legal and financial hurdles that a merger between these companies, which along with Ford (F) comprise Detroit's Big Three auto makers, would have to go through for a merger to make financial sense. 

Labor unions for both companies would have to sign off on the merger, possibly similar to the recent mergers between major airlines. There also are dozens of car and truck factories scattered across the nation and the world that would have to be consolidated.In addition, GM would be taking on troubled operations, and more brands and dealers, at a time when it's trying to fix its own operations and streamline its own set of nameplates and dealers.

The report said that even if talks with GM fall through, Cerberus will likely continue to seek a buyer for Chrysler. As recently as last month, Cerberus had said it was in talks with Daimler (DAI) to buy its remaining 19.9% stake in Chrysler. Cerberus would be expected to keep Chrysler's financing arm if a deal does happen, the Journal said.

The Journal reported on Saturday that GM had approached Ford in recent months about a possible merger on that front, but that Ford had called off the talks, concluding that it was best-off on its own.

GM’s stock fell to nearly a 60-year low this week after rating agency Standard & Poor’s said it was looking into downgrading GM’s long-term debt rating. With the credit markets in such bad shape as they are, and GM’s debt rating poor already, a rating downgrade would be detrimental to the survival of GM.

Chrysler has had to shut factories in recent months because of a lack of demand for the car company’s trucks and minivans. The company has been shopping itself to a few different global auto makers for the past few months, including Nissan and Renault.

In the report about GM possibly seeking a loan from the Fed's discount window, Barron's cited two people "with first-hand knowledge of the situation." The publication noted that the Fed would likely be under some pressure to grant the loan, because it has already widened the criteria for borrowing from it so much -- but it would also open the way for a slew of other corporations to make similar requests.