TRAVERSE CITY, Michigan (Reuters) –
Chrysler LLC has talked
with automakers in Russia and India about potential tie-ups and
was approached by Fiat about a partnership, although no formal
discussions are ongoing, a senior Chrysler executive said on
Chrysler, the No. 3 U.S.-based automaker, is also planning
a new car-based SUV that will hit showrooms in 2010, and has
identified over $1 billion in non-earning assets it will sell
to raise cash as it tries to turn around its operations.
Chrysler Vice Chairman and President Tom Lasorda said the
automaker is moving ahead with plans to forge alliances,
especially in emerging markets.
“When we look at alliances in different regions, we have
had discussions with multiple companies in Russia,” LaSorda
said on the sidelines of an industry event. “In India we have
had discussions with many companies.”
LaSorda, who declined to name the companies, said the
automaker may decide on a Russian partner by the end of 2009.
Chrysler was approached by Fiat SpA (FIA.MI), the Italian
automaker, for a potential partnership, he said.
“Have they approached us? Yes,” he told reporters,
referring to Fiat. “At this stage there is no formal discussion
going on, but there was an inquiry.”
Fiat Chief Executive Sergio Marchionne, credited with
turning around the Alfa Romeo, Lancia and Fiat brands, has said
Fiat is looking for a partner for its return to the North
Sources said last month Chrysler was in talks with Fiat
about leasing manufacturing capacity and sharing retail
distribution, which would allow Fiat to return to the U.S.
market for the first time in 25 years.
Chrysler is also in discussions with India’s Tata Motors
Ltd (TAMO.BO) about selling its Jeep Wrangler SUV in India and
possibly other Asian markets, according to sources.
LaSorda said Chrysler’s owner, Cerberus Capital Management
LP (CBS.UL), was committed to “holding on” to the automaker for
the long term as it seeks tie-ups amid a steep decline in U.S.
Detroit automakers have been hit hard by a dramatic shift
in buying to passenger cars and fuel-efficient car-based SUVs,
forcing them to restructure.
Chrysler’s U.S. sales have declined 23 percent through the
first seven months of the year.
NEW CROSSOVER SUV
Chrysler plans to invest about $1.8 billion over the next
two years to retool and expand its Jefferson North assembly
plant in Detroit that builds the Jeep Grand Cherokee, a
The new car-based SUV will retain the Grand Cherokee name,
U.S. sales of Grand Cherokee are down 32 percent year to
date as Americans shun gas-thirsty large vehicles amid record
high gas prices.
Chrysler also expects to finalize design plans for the new
small car being built for the automaker by Nissan Motor Co
(7201.T)(NSANY.O) within the next couple months.
The global small car, which will be built in Japan, is on
track to be sold in 2010, LaSorda said.
Chrysler, acquired by Cerberus a year ago, has faced
scrutiny over whether it can ride out a downturn in U.S. auto
sales that many analysts expect to stretch through 2009.
The automaker plans to raise cash by selling non-earning
assets such as land and office space.
“One advantage of private ownership is that we can sell
non-earning assets to generate cash,” LaSorda said. “To date,
we have identified over $1 billion in assets, and we are more
than half way to achieving that goal.”
The automaker has sold over $500 million in assets,
including land around its headquarters in Auburn Hills,
Michigan, and its Tritec engine plant in Brazil, according to
As a private company, Chrysler can focus on cash and not
worry about recording write-downs for any loss in the book
value of the asset being sold, LaSorda said.
He also said the automaker is meeting or exceeding its
Chrysler ended June with $11.7 billion in cash, and had
earnings of $1.1 billion before interest, taxes, depreciation
and amortization in the first half of the year.
(Editing by Gerald E. McCormick, Derek Caney and Jeffrey
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