Posted by: David Kiley on January 15, 2009
Chrysler LLC says it has ruled out selling an individual plant or brand, but said it would look to sell equipment and could license production of some of its current models to other automakers as it works to shore up its cash position.
Chrysler Vice Chairman Tom LaSorda said he could not address the question of whether Chrysler’s owner, private-equity firm Cerberus Capital Management, was shopping the company to potential buyers in its entirety.
“Those things are all dealt with at the Cerberus level, and at this point in time I just can’t speak to that,” he said.
LaSorda, speaking to reporters on a conference call, was responding to a Reuters report from Tuesday that said Chrysler had been in talks to sell assets to Renault-Nissan and auto parts supplier Magna International.
“This company is going to be around,” LaSorda said. “We are not going under.”
A couple of things:
1. What Chrysler sells and doesn’t sell is no longer really in its control. Soon, the Feds will appoint a “car czar” to determine if and how Chrysler becomes “financially viable” to justify the government loans it has begun recieving.
2. It has already been in talks with GM to acquire assets like Jeep and the minivan business. True, technically GM may have had to take the whole thing, but if you think GM was going to run the Dodge passenger car business for very long, you are mistaken. A lot of what is going on is semantics.
3. License production? I gather this means more deals like the one to supply Ram pickups to Nissan and Dakotas to Mitsubishi. First, the Mitsubishi truck project is a fiasco. Nobody is buying Mitsu Raiders. Second, I’ll be stunned if Nissan ever actually winds up selling Dodge trucks as Nissans.
4. Yes, VW is selling repackaged Chrysler minivans as Routans, but I’ll also be shocked if that deal gets renewed when it runs its course based on the chilly reaction when I bring it up to VW executives. That deal was hatched by former Chrysler COO Wolfgang Bernhard when he was head of the VW division a few years ago.
5. If I am a CEO of a car companay, do I really want to contract with Chrysler to build me anything right now given the state of the company’s finances and abysmal quality ratings?