Chrysler End Game Nigh? Talks on With Renault and Magna

We’ve read off and on speculation that Chrysler might not make it, even assuming a less punitive attitude towards carmakers under the Obama regime. It’s hard to justify government subsidies when a wealthy owner, Cerberus, is refusing to open its checkbook. And Chrysler’s number three status makes it the least problematic to shrink or liqidate.

Cerberus has no doubt thought this through many chess moves further out than I have, and appears close to hiving off large pieces of the struggling automaker, From Reuters:

Chrysler is in talks to sell key assets to Renault-Nissan and auto supplier Magna as it rushes to restructure after taking $4 billion in U.S. government loans, according to people with knowledge of the discussions.

The string of potential deals would deepen ties between Chrysler LLC and two of its key current partners but could also mark the end of the struggling No. 3 U.S. automaker as an independent venture…

The present round of talks with Renault-Nissan gathered momentum in recent weeks and has included discussions about a deal to sell Chrysler’s iconic Jeep brand, according to three people with knowledge of the talks.

Renault-Nissan, an alliance headed by Carlos Ghosn, has been looking to clarify whether a deal to acquire assets from Chrysler would jeopardize the company’s access to U.S. government funding, one of those familiar with the talks said…

Chrysler has also discussed selling its assembly plant in Belvidere, Illinois, to Canadian auto supplier Magna in exchange for long-term production contracts, according to the three people familiar with the automaker’s talks.

In a separate set of deals, Chrysler is also looking to sell the tooling and other assets related to its PT Cruiser model, the three said.

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  1. eh

    I think it’s pretty clear that Chrysler won’t make it — they’re the weakest and will be the sacrificial offering to appease congressional gods who’ll soon be asked to pump more money into GM and Ford.

  2. Anonymous

    You can merge or sell but the problem remains. Ford sold Jaguar and Landrover to Tata which is now
    going to the British government for money.

    Jeep might be a viable thing to own if you can get it free and clear of debt and unfunded pension liabilities but can you?

    As Mark Steyn quipped American auto makers are old folks homes with a car division.

  3. Anonymous

    Losing Chrysler is not a bad thing. Aside from jeep and minivans, what do they make. The PT is a POS. The 300M was a great try, but ultimately failed. Dodge has nothing out there for the masses, in fact I have been looking around for one on the road and have not seen anything that was not a pick-up. Unfortunately Chevy and Ford are so far ahead in that market that it doesn’t make sense to stay in. Good night and good luck.

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