UPDATE 1-Chrysler looking at options for Viper business
(Recasts, adds details from company release, background, byline)
DETROIT, Aug 27 (Reuters) - Chrysler LLC is exploring strategic options for its Dodge Viper sports car business as the struggling U.S. automaker tries to raise cash to ride out a deepening U.S. auto downturn.
"We have been approached by third parties who are interested in exploring future possibilities for Viper," Chief Executive Bob Nardelli said on Wednesday in a memo to employees.
"As the company evaluates strategic options to maximize core operations and leverage its assets, we have agreed to listen to these parties," he added.
The Dodge Viper is a low-volume V10-powered sports car, which was first produced in 1992.
Chrysler spokesman Todd Goyer said about 11 Viper cars are built daily at Chrysler's Conner Avenue assembly plant in Detroit. Chrysler has sold 682 Vipers so far this year, up 111 percent from the previous year.
Like its larger competitors General Motors Corp GM.N and Ford Motor Co (F.N), Chrysler -- majority-owned by private equity firm Cerberus Capital Management [CBS.UL] -- has faced scrutiny over its ability to ride out a downturn in U.S. auto sales that many analysts expect to stretch through 2009.
All three U.S. automakers have been hit hard by the sharp decline in sales of pickup trucks, SUVs and vans that followed the rise in gas prices this year.
Chrysler said the decision on Viper is "a stand-alone strategic review, unique to Viper" and it has not set a definitive timetable for completion of the review.
Chrysler, which has retained Lazard as its financial adviser on Viper, had said earlier that it has identified about $1 billion in non-earning assets for potential sale to raise cash.
The company, which has released limited financial data since Cerberus bought it from Daimler AG (DAIGn.DE) about a year ago, ended June with $11.7 billion in cash and had earnings before interest, tax, depreciation and amortization of $1.1 billion in the first half of the year. (Reporting by Poornima Gupta; Editing by Steve Orlofsky, Dave Zimmerman)
