General Motors (NYSE: GM) continues its comeback from the dark days of 2006 while Ford Motor's (NYSE: F) re-shaping is taking more time. Both American car makers have faced tough times in recent years as gas prices shifted consumer demand away from the product mixes of these two companies. The problem caught them off guard, and combined with health care and pension responsibilities, the financial hurt mounted. But what about Chrysler Group, the smallest of the "big three?"

DaimlerChrysler (NYSE: DCX) purchased Chrysler some time ago, and since then, there have been ups and downs for the Chrysler Group. Its model makeup received some fine German engineering (the 300M) and Chrysler's cars have been put through a design shakeup that made them emerge rather nicely, if you ask me. But Chrysler Group, the small regional player that makes trucks, SUVs and minivans, wants to grow further. To do this, its chief wants to expand internationally using new partners.

The Chrysler Group may be sold by its Daimler parent soon, according to rumors and reports. Either an existing automaker or a private equity company may take the reins, but that doesn't dampen the need for Chrysler to stop in its tracks and do something to expand. Tom LaSorda, Chrysler's chief executive, is pressing ahead even as possible suitors are being lined up for the company. Will Chrysler become the part of the "three" from the big three again? It's got some catching up to do if that's the case.

MAJOR PAPERS:

• According to the Wall Street Journal (subscription required), Viacom (NYSE: VIA) may announce a licensing deal with new Internet service Joost.
• Also in this morning's Journal, Airbus owner EADS surprised investors and employees yesterday by postponing a long-awaited announcement of Airbus's big makeover plan, called Power8.
• And in more airline news in the Journal, JetBlue (NASDAQ: JBLU) is planning to overhaul its procedures after a storm caused the company to cancel a thousand flights and strand thousands of travelers.
• According to the Financial Times (subscription required), rumors have spread that Anheuser-Busch (NYSE: BUD) and InBev are in serious talks.

OTHER PAPERS:

• The Sunday Edition of the U.K. Times reported that JP Morgan (NYSE: JPM) will formally kick off a GBP 7B auction of DaimlerChrysler's (NYSE: DCX) Chrysler unit as early as this week.
• According to French paper La Tribune, STMicroelectronics (NYSE: STM) will supply multimedia microprocessors to Nokia (NOK) for its mobile telephones.

Just call it an eastern hemisphere hedge for DaimlerChrysler AG (NYSE: DCX).

DaimlerChrysler announced Thursday that it plans to buy 297 million shares of China's Beiqi Foton Motor Co. LTD at 2.75 yuan per share for 816.7 million yuan or about $104 million. Those 297 million shares would represent a 24% stake in Beiqi Foton

Beiqi is China's largest truck maker, and one analyst/economist who follows European / Asia business and trade flows says Daimler's investment is both a hedge and a potential solid-win tactic.

"You have to like this move," said David Chandler, analyst/economist with the Econometrics Group. "Daimler gets a potential low-cost production source for medium and heavy trucks, while at the same time better-positioning itself in the promising Chinese truck market. There are always opportunity costs when you invest, but very rarely does a company get this type of hedge / market opportunity for $100 million. It's a bargain and a solid move."

Chandler said Daimler trails General Motors Corporation (NYSE:GM) in joint-venture deals with China-based companies, so the Beiqi deal represents progress against a major U.S. competitor, as well.

DaimlerChrysler's shares traded slightly lower Thursday at mid-day, down 15 cents to $58.29. Meanwhile, General Motors was down 43 cents to $29.07 and Ford Motor Co. (NYSE: F) had dipped 2 cents to $8.14.

Investment Analysis: The best way for the typical investor to play DaimlerChrysler? Investors who can tolerate a moderate level of risk should buy DCX now, in stages, over the next two weeks: 50% of your position today, 50% next week. Conservative investors -- those who can tolerate only a low level of risk -- should wait and see if DCX pulls back to $56. If it does, and bounces off $56, consider adding a small amount of shares to your portfolio.

Joseph Lazzaro is a news editor at Theflyonthewall.com (subscription required), based in New York.

For general and main news here is the first morning post.

Sirius Satellite Radio, Inc. (NASDAQ:SIRI) reported third-quarter financial results this morning. The company's loss narrowed as revenue more than doubled because of a surge in subscribers. Sirius reported a loss of $162.9 million, or 12 cents per share on revenue of $167.1 million, while analysts were looking for a loss of 14 cents per share. SIRI shares are up nearly 2.5% in pre-market trading. The company left its outlook unchanged.

TheStreet.com examines the different alliances and industry players when it comes to downloaded content. The possible talks between Verizon (NYSE:VZ) and Google, Inc.'s NASDAQ:GOOG) YouTube, Microsoft Corp. (NASDAQ:MSFT) offering TV shows and movies through its Xbox and Apple Computer, Inc. (NASDAQ:AAPL) iTV platform. Microsoft, the article concludes, might yet be the winner despite competition from TiVO (NASDAQ:TIVO) and possibly from Sony Corp. (NYSE:SNE) as well.

Later yesterday we also heard of a deal between no. 2 chip maker, Advanced Micro Devices (NYSE:AMD), and no. 2 worldwide (no. 1 in the U.S.) computer maker, Dell, Inc. (NASDAQ:DELL) to supply the latter with chips -- Athlon 64 X2 dual-core microprocessors to be exact --for its line of desktop PCs sold to medium to large business customers.

After rumors have been going around for months of what eBay, Inc.'s (NASDAQ:EBAY) strategy in China is, today we learned that eBay Eachnet (eBay China) and Chinese Internet search company Baidu Inc. (NASDAQ:BIDU) would collaborate. While Baidu will promote PayPal's China service, Beibao, EachNet will use Baidu exclusively for its search advertising. The companies will also develop a co-branded toolbar.

Reports today say that Germany's DaimlerChrysler AG (NYSE:DCX) plans to invest about 2.5 billion rupees ($55 million) to build a second auto plant in India. The move comes three months after General Motors Corp. (NYSE:GM) announced a similar intention.

Someone else is investing in India, this time it's Coca-Cola Co. (NYSE:KO) which plans to invest $250 million in its Indian bottling arm, according to the Economic Times paper.

Still in India, Microsoft Corp.'s (NASDAQ:MSFT) CEO met with Indian Prime Minister, as Microsoft struck an alliance to provide Internet search to customers of one of the country's leading cell-phone carriers.

Google, Inc. (NASDAQ:GOOG) has decided to try the radio. It is hiring radio sales people and is spending heavily in a bid to expand its position in the $20 billion radio industry.

McDonald's Corp. (NYSE:MCD) U.S. comparable sales rose 5.6% in October due to its breakfast business, Snack Wrap products and the Monopoly game promotion.

Time Warner Inc. (NYSE:TWX) is now pulling out of China, ending a joint venture cinema in China it had opened four years ago, citing Beijing tightening restrictions on foreign investors.

Finally, Big Oil won the elections in California after Californians rejected a proposition that would have taxed oil companies and used the money to fund renewable energy.

September 15, 2006, a day that will live in infamy. Well, that may be overstating the case. It was, however, the day both Ford Motor (NYSE: F) and DaimlerChrysler (NYSE: DCX) announced major cutbacks in production and various other cost-cutting moves. Since then, there have been many negative stories about the auto industry.

Before buying into the widespread despair, investors will want to read Sandra Ward's interview (subscription required) with widely respected auto industry analyst Chris Ceraso in the September 25, 2006 issue of Barron's. Yes, Ford announced a Q4 production cut of 21%. Chrysler forecasts a 16% production cut. This will still leave both companies with production in excess of demand through FY 2007. Ceraso, and other auto industry insiders, are particularly disappointed with the vagueness of Ford's third restructuring plan in five years. Ford's plan is much less detailed than GM's plan with few specific rubrics for measuring cost-cutting effectiveness. Ceraso forecasts a $5.5 billion loss through 2007, larger than Ford's estimate. He forecasts cost savings of $5 billion through 2007, smaller than Ford's estimate. Ceraso does not see any indication of Ford profitability until 2009.

There are several macroeconomic factors operating in Ford's favor right now, but negative changes in any one of them could further hamper Ford's turnaround efforts. Oil prices could climb again to uncomfortable levels for any number of reasons. The Fed could hold interest rates at present levels, which is better than any increase. In many real estate markets, housing prices are beginning to moderate, giving people more money to spend on non-mortgage related items.

While Ceraso remains cautiously positive, the fallout from Ford and Chrysler's announcements continues downstream. Virtually every automobile parts supplier's stock has taken a hit. Modine Manufacturing, Lear, and American Axle & Manufacturing Holdings are down. Visteon Corp. has revised its previous forecast downwards and says it will not meet its financial targets for the second half of 2006. Visteon has already began layoffs. Delphi Corporation, a huge auto parts supplier, has 1,400 more workers ready to accept buyout offers. BorgWarner (subscription required) has announced plans to cut staff by 13% or 850 jobs, and lower its per-share profit for 2006 from $4.35- $4.60 per share to $4.10 at the most.

The ripple effect has already spread to the raw materials suppliers. U.S. Steel Corporation, AK Steel Holding Corporation, Algoma Steel and Mid-West Materials may all end up with excess supply. Given China's continued export of steel, there may be a worldwide glut in 2007, forcing prices to unprofitable lows.