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