Chrysler has been – some say desperately – seeking to “sell key assets” for a while. The Nikkei (sub) now says that Chryler might be getting close. The usual “unnamed people with knowledge of the discussions” whispered that Chrysler is talking to Nissan-Renault and the Canadian auto supplier Magna. The topics of the discussion are the Jeep brand and Chrysler’s Belvidere plant. The Jeep brand would go to Renault-Nissan, Magna would take the plant.
The parties aren’t strangers.
Chrysler had announced an alliance with Nissan last April.
As for Magna, the interest probably stems from Magna’s subsidiary Magna Steyr, which is creating more and more auto contract manufacture business. Magna Steyr has produced the Chrysler Voyager from 2002 to 2007, and currently produces the Chrysler 300C, the Jeep Commander and Jeep Grand Cherokee. Magna was one of the bidders for Chrysler when it was sold by Daimler in 2007.
According to Reuters, Chrysler has been in talks with Chinese automakers Chery and Guangzhou Automobile Industry Group Co, to sell them the PT Cruiser “brand” and tooling.
Of course, nobody will officially confirm that anything is true. Reuters says that representatives of Chrysler, Cerberus, Magna, and Nissan declined to comment. A spokeswoman for Renault denied talks were under way.
Reuters say there is reason for secrecy and plausible deniability: Renault-Nissan is looking to see whether a deal to acquire Le Jeep would hurt access to U.S. government funding. Good thinking.
[For the uninitiated: an asset sale is when you sell what’s owned by the company without selling the company– and the liabilities that go with it.]
Ashes to ashes, dust to dust, into the ground this company we thrust….
Another part of our heritage going bye-bye. That is more manufacturing capability lost, and expertise in those engineering disciplines disolved.
What can you do?
So, with this deal, what will be left for Chrysler LLC and Cerberus? Is there anything left, or was that it? Is Chrysler stripped now?
Renault-Nissan is looking to see whether a deal to acquire Le Jeep would hurt access to U.S. government funding.
Since the government’s pockets are wide open, what private company wants to spend their money when the taxpayers can do so?
I don’t know who would want any part of the Big 2.8 as long as the UAW comes with it?
Let’s not forget, that Renault owned most of Jeep (via American Motors) from about 1979 through 1987 when Renault and AMC stockholders sold out to Chrysler. AMC was over 50% owned by Renault, and Jeep was wholly owned by AMC.
So, Jeep has been majority owned by foreigners prior to Daimler buying out Chrysler.
If Jeep is 70% of Chrysler ‘best’ assets (for example), leaving the other lower quality ‘assets’ for liquidation, then the return for debtors (including the US Government) might be dramatically lower!
Aren’t there anti-stripping laws in the USA?
If the Board know that this is the ‘best’ asset and the company will fold next week after the sale of the ‘best’ asset, can’t that deal be reversed?
God, i hope someone in government is reading this and they do something about this chrysler fiasco. Whats the conditions of a break up now? who do they go after to get the money back? As we say in England, they’re really taking the piss now.
@ Ingvar :
“So, with this deal, what will be left for Chrysler LLC and Cerberus? Is there anything left, or was that it? Is Chrysler stripped now?”
I’d say about 4-7 billion taxpayer dollars.
Snark on
Jeep: It’s a Renault-Nissan thing, you wouldn’t understand…
Snark off
A few observations on the smoldering Pentastar heap:
Cerebrus ONLY wants GMAC and Chrysler financial which they’ll merge in to the world’s largest auto/home financing company (oh, I’m sorry, TARP$ = BANK (even though GMAC doesn’t meet the capital requirements for that designation))
Jeep should be sold to GM, even if it requires government funding, then sell through the new, shiny and ultimately wholly underutilized Hummer dealer network
Trucks & vans would go to Nissan
This story originated with Reuters. To say they have been accurate with “unamed sources close to the talks” type of stories before is like saying the Toyota Camry is sex on wheels. “Respected media sources” have been throwing lies around about Chrysler for many a month now. Since they’re private and very tight with information, the media feels the need to make stuff up.
If there is any truth to this I figure what is happening is that lower level people somewhere are getting word of discussions going on without knowing any details and then blabbing to the media. One of the assembly plants was visited by Nissan (Sterling Heights) and the discussion was about them taking over that plant. It is quite possible that is what this whole thing is about. And Magna has cash flow issues itself, especially since NVG is having so much trouble. However, The hiring of Wolfgang Bernhard by Magna is interesting, so I won’t rule out Magna totally. But it’s too early to tell if this is going to lead to something.
I see that Chrysler’s “unnamed sources” are finally back from vacation.
Since so many of their lies have been true before, I for one welcome their return.
[/sarcasm]
eastaboga: Except that in exchange for TARP funds, Cerberus had to reduce its stake in GMAC from 51% down to 14.3% ownership.
I would think Nissan-Renault would also want Dodge Trucks given their interest in replacing the Titan.
Does Nissan keep the Pathfinder and X-Terra if they acquire Jeep?
One has to wonder about how Chrysler might survive.
Who was it that mentioned that this is karma, due to how Chrysler treated Rootes Group (UK) in the 1960’s?
Well, I’ve said exactly the same thing about how Chrysler treated AMC in the 1980’s, as well. Karma. Paybacks are truly a biatch.
Interesting how Daimler treated Chrysler, ain’t it?
Modern business is no different than living in a jungle, I’d say.
Anyway – does anyone recall what happened the last time Chrysler was against the ropes, in 1980? They sold what remained of Rootes Group, by then called Chrysler UK and Chrysler Europe (which had once proudly been Simca) to Peugeot for one dollar US.
Perhaps if Cerberus would be willing to part with Chrysler, I’d be willing to cough up $1 out of my wallet. Maybe. Just for the adventure. And the significant pay-raise I could give myself (from taxpayer money). Wow, that’d make a change. Getting money FROM uncle sugar instead of paying…
Renault-Nissan would be a good fit for Jeep.
Nissan already has a piece of the action with their agreement for a badge engineered Ram pickup to replace the Titan.
I’m keeping my fingers crossed for a diesel JK Wrangler.
windswords, Reuters’ coverage of the Middle East, their use of fauxtography, biased stringers and editorializing in their “news” articles has led me to conclude that they aren’t a credible news agency.
For the record, Tom Lasorda categorically denied the reports on both the sale of Jeep and the sale of the Belvidere plant.
The PT Cruiser part might have some basis because Lasorda did say that Chrysler is looking to sell tooling from previous models. Since the PTC is a dead man walking, it’d probably be one of those models.
http://www.thefirehouse.biz/blog.do?id=1272&p=entry
Chrysler Vice Chairman and President Tom LaSorda on Wednesday strongly denied reports and rumors that the company is in discussions to sell its Jeep brand, any manufacturing plants or the tooling for an existing vehicle.
“What was reported that we’re in discussions to sell the Jeep brand is absolutely false,” Lasorda told reporters on a conference call Wednesday morning.. “We will not separate the brands from the company.”
He said that the company has said for more than a year that it will sell non-earning assets, or assets that “may be coming due.” Chrysler has had discussions about selling the tooling of previous generation vehicles, or vehicles that are discontinued. But reports that the company would sell one of its manufacturing plants are untrue, and don’t make any sense.
“If we were to sell any assets, and if you looked at the loan agreement, the loan agreement would not allow us to do that without going through the ‘car czar’,” he added.
I heard Patty’s Sister is dating Julia’s Brother’s best-friend’s Sister’s Ex-Boyfriend!!!
OMG OMG OMG
They’re practically married, and they won’t even tell us!!!
Oh yeah– because it’s private, and none of our business until we’re told. Gossip is not public announcement. Let’s pretend we know this. You’re damaging Chrysler’s credibility to attempt to strengthen your own, and it’s getting quite tiresome.
You’re ‘crying wolf’ for them, and you’ve no place.