Nissan Competes For Stake In Chrysler

October 22, 2008
Nissan logo

Nissan logo

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 Car Connection
See the winners »
The Car Connection
Commenting is closed for this article
Ratings and Reviews
Rate and review your car for The Car Connection
Review your car
The Car Connection Daily Headlines
I agree to receive emails from The Car Connection. I understand that I can unsubscribe at any time. Privacy Policy.
Thank you! Please check your email for confirmation.