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Dragon

Nissan-Renault out as Chrysler Suitor

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http://www6.autonet.ca/News/story.cfm?stor...3651242-ap.html

by HANS GREIMEL - Associated Press posted February 21, 2007

TOKYO (AP) - The Renault-Nissan auto alliance is uninterested in buying DaimlerChrysler's money-losing Chrysler division, despite exploring a North American partnership last year, a Nissan official said Wednesday.

Tokyo-based Nissan, 44 per cent owned by Renault SA of France, is always open to new partnerships, but not right now because it is focused on its own financial woes, spokeswoman Madoka Soma said.

Carlos Ghosn, head of both automakers, entered unsuccessful partnership talks with Detroit-based General Motors Corp. last year and had said a North American ally would be a good balance for the company.

But after Nissan reported a 22 per cent slump in earnings in the October-December quarter, priorities have changed.

"As Mr. Ghosn has said, the company right now is as it is today because it has its own problems inside and we're not going outside to look for the solutions," Soma said. "We're not in a rush for a partner."

The auto industry has been pondering the fate of Chrysler since last week when its German parent, DaimlerChrysler AG, said it was putting all options on the table in dealing with its troubled U.S. unit.

Speculation about potential partners, or even a buyer, jumping in to use Chrysler's expansive parts and dealership network to gain entry to the U.S. market has ranged from a tie-up with Nissan and Renault to talk of a link with Hyundai or even GM.

While announcing earnings earlier this month, Ghosn said Japan's No. 3 automaker faced a "performance crisis" that must be fixed as "soon as possible." The company was also forced to cut its full-year profit forecast.

Renault chief financial officer Thierry Moulonguet has since told investors in London that the Renault-Nissan duo isn't interested in Chrysler in any manner, the Wall Street Journal reported earlier Wednesday.

DaimlerChrysler's fourth-quarter earnings plunged 40 per cent on weaker demand at the Chrysler unit, where sales fell seven per cent. Chrysler lost about US$162.8 million in the period.

The Stuttgart, Germany-based parent company, the world's No. 5 automaker, has meanwhile announced plans to eliminate 13,000 jobs in the U.S. and Canada, or about 16 per cent of its workforce, and close a plant in the U.S. state of Delaware in a bid to shave costs.

Should Renault and Nissan have no interest, it raises the question of how much money DaimlerChrysler might be able to even ask for Chrysler. Estimates range from $5 billion to $13.7 billion, but Daimler-Benz AG paid $36 billion for the American icon in 1998.

In a bid to strengthen their global market position, Nissan and Renault entered talks last year with GM about forming a three-way alliance. But the talks came undone after Nissan and Renault declined to pay a premium for reaping what GM said would have been a disproportionate share of the benefits.

Earlier this month, Renault SA posted a modest rise in second-half profit, but a sag in sales threatened to undermine a recovery promised by Ghosn.

so with Hyundai and Nissan out as suitors, does it make less sense for GM to buy them as a defensive move? (ie to keep them out of competitors hands)

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As you pointed out, now that Hyundai and Nissan/Renault are both out, GM is the only party left that's alledgedly intrested. I am really afraid now that they might actually buy them. :o

I know Toyota wouldn't be stupid enough to buy Chrysler, but they would be opening up 15% of the NA market to themselves and most importantly (to Toyota), they would increase their capacity which is something they are running out of. They would also become the #1 automaker which is what they've always wanted. And they can certantly afford it...why does everyone say they would never buy Chrysler then?

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I really doubt GM will buy Chrysler. Chrysler is of absolutely zero value to GM other than Jeep. They don't need production capacity, don't need RWD cars with Zeta coming, and really, Chrysler has nothing other than Jeeps that would be unique to GM. The Patriot would actually be a very nice vehicle if it had a GM interior instead of a Chrysler interior, the Wrangler is something GM doesn't have currently (and could share a platform with the H4). Maybe GM should offer $6 billion for Jeep only.

Or, I suppose GM could just do nothing, let Chrysler die, and then take over Jeep's share with an expanded Hummer range. But, I think Jeep still has value regardless, as GM would have those sales NOW rather than later.

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i'm kinda surprised Nissan & Ghosn pulled out, knowing how good he is at turning around automakers. To me that shows how truly f@#ked Chrysler's position might be.

Not to mention, the LX's would have given them a good foothold in high volume RWD that they dont' have, and pick ups/minivans that are way more respected than their current offerings.

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Ghosen knows Nissan is starting to slide again. The fad wore off because Nissan is no Toyota or Honda, Nissan is not ESTABLISHED like that in the mind of consumers.

THere are other options still, beyond GM. God forbid, but a Chinese firm could always buy the company (Or China itself, since it has enough of our currency to pretty much buy our soul) Hell, we allow carmakers from CLOSED markets to come in and destroy our automotive sector, so I don't see that the politicians would be opposed to the communists buying a part of it.

Then there's alway independent investors or a group of investors..

UAW, this might be your time to shine and redeem yourself in the eyes of the american public!

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I agree with you FOG.

I always felt Ghosn was like a fart in the wind.

His only advantage is that he is aggressive. That is it.

He is not a visionary or thinks long term.

He wanted GM for the amount of RD and its technology especially the 4x4 and flex fuel capability plus some pie from the hybrid mode system which GM was sharing with DC and BMW.

As a matter of fact that can be another reason why GM does not want other manufacturer to buy Chyrsler considering the amount of money GM has invested with DC and BMW for the hybrid systems. That will be like a free pie to the new manufacturer.

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