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Nissan Competes For Stake In Chrysler
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A report from the Detroit News today indicates that Nissan, which has been allied with Renault since 1999, is interested in acquiring approximately 20 percent of a struggling Chrysler. The move puts pressure on the Chrysler/GM negotiations, and would result in a very different Chrysler than the one GM intends to subsume.
The Renault-Nissan alliance is currently profitable, though it, too, is feeling the strain of a tough automotive marketplace. Its stockholders are wary of adding a third partner to the mix, especially one as troubled as Chrysler. It is Nissan who would perform the acquisition, as that brand has cash on hand as opposed to the French Renault, which has debts in excess of $5 billion.
Nissan CEO Carlos Ghosn made the proposal to Chrysler's owner, Cerberus Capital Management, in recent days. Benefits include the joint projects already in the works between the two automakers; Nissan is expected to provide its small-car acumen and products to supplant Chrysler's mediocre offerings (Avenger, Stratus) in that category, and Chrysler is said to be producing the next-gen full-size Nissan Titan pickup, perhaps using parts/pieces of its excellent new Dodge Ram. Managers at both companies claim that their teams enjoy good synergy, another positive for the potential acquisition.
But a possible wrench in the gears of this deal is Cerberus' CEO Stephen Feinberg, who feels that a GM/Chrysler merger is in the best interests of the flailing U.S. auto industry. As we've reported, huge amounts of cash would be needed for this scenario to play out, and credit availability has all but dried up in the current economic environment.--Colin Mathews
The Renault-Nissan alliance is currently profitable, though it, too, is feeling the strain of a tough automotive marketplace. Its stockholders are wary of adding a third partner to the mix, especially one as troubled as Chrysler. It is Nissan who would perform the acquisition, as that brand has cash on hand as opposed to the French Renault, which has debts in excess of $5 billion.
Nissan CEO Carlos Ghosn made the proposal to Chrysler's owner, Cerberus Capital Management, in recent days. Benefits include the joint projects already in the works between the two automakers; Nissan is expected to provide its small-car acumen and products to supplant Chrysler's mediocre offerings (Avenger, Stratus) in that category, and Chrysler is said to be producing the next-gen full-size Nissan Titan pickup, perhaps using parts/pieces of its excellent new Dodge Ram. Managers at both companies claim that their teams enjoy good synergy, another positive for the potential acquisition.
But a possible wrench in the gears of this deal is Cerberus' CEO Stephen Feinberg, who feels that a GM/Chrysler merger is in the best interests of the flailing U.S. auto industry. As we've reported, huge amounts of cash would be needed for this scenario to play out, and credit availability has all but dried up in the current economic environment.--Colin Mathews
Responses (3 total)
By xjug1987 | Posted: Oct 22nd 2008, 06:10:41 PM
Not sure why GM wants Chrysler. For the MiniVans, nah? And there is no way Cerberus will let Chrysler go, with the $11B we keep hearing about? Does GM really need Jeep? Why, because its got a great heritage? Ever heard of Oldmobile? They ought to make their own Jeep out of Hummer, but time is waning!
Nissan needs the trucks, so it makes sense that they get involved for the new Dodge Ram, but what else? I'm not really sure why anyone wants Chrysler. Don't get me wrong, I do like some of their products, but have never bought one.
Its like picking the ugly girl at a dance, just because she's got special parts you can play with however, there are prettier girls out there with the same parts.
By Dave | Posted: Oct 22nd 2008, 04:44:52 PM
Right on Collin, every news article states that the GM/Chrysler merger would not work. Even most of GM higher ups state it will not work and just destroy Chrysler. GM is prob going down no matter what which is a shame. Chrysler has what Nissan wants which is trucks, V8 Rwd architceture, Jeeps and a prob the best minivans in the market. Nissan has small cars for Chrysler but the will prob be Renault built. Remault may want back in the U.S, and Chrysler already has a dealer network and factorys for this. Lets hope this all bodes will for everyone. Carlos Gohsn is prob the best and smartist CEO out there.
By Collin | Posted: Oct 22nd 2008, 03:16:09 PM
I think Nissan buying Chrysler would probably be the best thing for both Nissan and Chrysler. GM buying Chrysler just seems like GM trying to take down a major U.S. competitor one division at a time.
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