Chrysler tries to calm break-up fears

Chrysler tries to calm break-up fears  
Filed under:
News, Chrysler
on 01/16/2009

Chrysler held a snap press conference on the Detroit Show's trade day, as senior executives sought to reassure the media that the company was not about to be broken up. Reuters had reported that Renault-Nissan was in discussions to acquire the Jeep brand, while an assembly plant in Belvedere, Illinois, was to be sold to supplier Magna.

Perhaps concerned at the poor reception of Sunday's press event, where Chrysler vice-chairman Jim Press made light of the company's situation and concentrated instead on the ENVI electric car programme, Chrysler bosses were much more direct this time.

There would be no piecemeal sale of brands or factories, said vice-chairman Tom LaSorda, and the report about Jeep was “absolutely false”. He said: “We will not separate the brands from the company,” adding that such a move would require US Government approval. However, new US president Barack Obama would be unlikely to veto a deal that safeguarded US jobs.

Renault has said it is not in talks over Jeep, but Renault-Nissan chairman Carlos Ghosn is known to covet the brands, which Renault once owned but sold to Chrysler more than 20 years ago.

The Magna rumours grew from the announcement that former Chrysler COO Wolfgang Bernhard, has joined Magna as a consultant. Magna was involved in talks with Chrysler over a Russian JV, but talks broke down in 2007.

LaSorda did say Chrysler was prepared to sell tooling and production licences for certain models, including the PT Cruiser retro-MPV, which will go out of production this year. Chrysler last year sold the previous-generation Sebring model to Russia's GAZ, which is now building the car for the Russian market as the GAZ Siber.

And Chrysler is open to further partnerships on future models. It already works with Volkswagen and Nissan, though it pulled out of a deal to build small cars in China with Chery Automotive last year.

Ultimately any decisions will rest with Chrysler's parent, private venture capital firm Cerberus. “We've had no indication from Cerberus that they have had any discussions,” said Jim Press. the message may be 'business as usual', but in reality, any decisions are effectively out of the Chrysler management's hands.

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