Chrysler rules out sale of individual brands

DETROIT Wed Jan 14, 2009 12:49pm EST

The Chrysler logo is seen at the North American International Auto Show in Detroit, Michigan in this January 13, 2009 file photo. REUTERS/Rebecca Cook

The Chrysler logo is seen at the North American International Auto Show in Detroit, Michigan in this January 13, 2009 file photo.

Credit: Reuters/Rebecca Cook

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DETROIT (Reuters) - Chrysler LLC Vice Chairman Tom LaSorda said on Wednesday that the No. 3 U.S. automaker would not sell an individual brand like Jeep, but would pursue deals to sell off tooling for models going out of production, or even licensing production of current models.

LaSorda, who was speaking to reporters on a conference call, was responding to a Reuters report from Tuesday that cited people with knowledge of the discussions as saying that Chrysler had been in talks to sell assets to Renault-Nissan and auto parts supplier Magna International.

"This company is going to be around," LaSorda said. "We are not going under."

LaSorda said he could not address the question of whether Chrysler's owner, private equity firm Cerberus Capital Management, was shopping the company to potential buyers in its entirety.

"Those things are all dealt with at the Cerberus level, and at this point in time I just can't speak to that," he said.

He said consideration of any sale of the automaker would be the responsibility of Cerberus, and would have to be approved by U.S. officials under the terms of Chrysler's $4 billion U.S. government bailout.

LaSorda said Chrysler had not had any discussions with Renault SA, which owns a 44 percent interest in Nissan Motor Co Ltd.

But Chrysler had been in discussions last year with Magna and Russian carmaker GAZ about making vehicles in Russia based on the platform behind the Dodge Caliber and Jeep Patriot, LaSorda said.

Those talks, he said, had broken off because of the economic downturn in Russia and the United States but could be revived.

"If you look at the economy here, it's bad, and it's extremely bad in Russia," LaSorda said. "That's not to say that things in the future may not turn around or they elect to invest on their own and call us back."

LaSorda said there was no consideration of Magna running one of Chrysler's U.S. plants. Sources had told Reuters that Magna had been in discussions with Chrysler to run its Belvidere, Illinois plant.

"That's just not what we would do," LaSorda said.

LaSorda said he already had been in contact with Wolfgang Bernhard, a former Chrysler chief operating officer who was recently hired as an adviser to Magna.

Chrysler is also looking to sell tooling for models going out of production and could consider selling a license to another company to manufacture one of its existing models, LaSorda said.

"We've been very clear on that one," LaSorda said. "We have not seen any proposals from the Japanese, Korean or even the Chinese."

Sources had told Reuters that Chrysler was looking to sell the tooling for its PT Cruiser and was in talks with a pair of Chinese automakers on such a deal.

"If someone came to us and said would we consider licensing an existing model, that would be difficult, but it would be something we would consider," LaSorda said.

A proposed merger between General Motors Corp and Chrysler was scrapped in November as both automakers worked to shore up cash and prepare pleas for a combined $17.4 billion of emergency government funding.

Cerberus and Nissan, which is 44 percent owned by Renault, declined to comment on the Reuters report. Renault said it was not in talks with Chrysler.

(Reporting by Kevin Krolicki, editing by Gerald E. McCormick and Lisa Von Ahn)

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