Nissan-Renault focused on cash, rules out deals

LOS ANGELES (Reuters) - Nissan Motor Co (7201.T) and Renault SA (RENA.PA) Chief Executive Carlos Ghosn said on Wednesday his focus was preserving cash rather than pursuing a partnership with a U.S. automaker, saying the credit crisis and plunging sales threatened to drive rivals out of business.

"It is out of the question for Nissan or Renault to be involved in any deal that involves cash," Ghosn told reporters on the sidelines of the Los Angeles auto show.

Although Ghosn stopped short of ruling out future talks with one of the embattled Detroit automakers, he said the crisis for the industry would shut down consideration of such deals across the industry until credit begins to ease.

"I think 2009 -- forget about anything happening because the year looks really bad," Ghosn said. "If something was to happen, it would happen now, but it's not happening."

The remarks underscored the extraordinary pressure and dwindling options facing U.S. automakers, especially Chrysler LLC, Nissan's existing partner in a product-based tie-up.

Chrysler CEO Bob Nardelli said last week that the No. 3 U.S. automaker needed both a share of a U.S. government bailout and a partner in an alliance like the Nissan-Renault model.

Cerberus Capital Management, the private equity fund that owns Chrysler, failed to clinch a deal to sell Chrysler to GM earlier this month.

Cerberus has also reached out to Ghosn and South Korea's Hyundai Motor Co (005380.KS) in an attempt to find a buyer for some or all of Chrysler's assets, people familiar with the talks have said.

Ghosn said it was possible one of the U.S. automakers could fail. Nissan's exposure to a Chrysler bankruptcy under an existing deal to supply it with a small car in exchange for a full-size pickup truck would be minimal, he said.

"I don't know if one will go down," Ghosn told reporters. "I think the whole industry crossing 2009 has to be very cautious. The likelihood of some company going bankrupt under these conditions is very high."

U.S. auto sales have plunged to their lowest level in a quarter century amid a slump in consumer confidence and the economy and U.S.-based automakers have appeared before Congress to plead for $25 billion in aid to support their companies.

Ghosn and General Motors Corp GM.N Chief Executive Rick Wagoner had talks about adding an expanded alliance two years ago, but those talks broke off and Ghosn said there had been no further contact between the two sides since.

The reluctance of GM management to pursue a deal doomed consideration of that expanded alliance, Ghosn said.

"If you start a marriage where someone is very excited and the other is a little bit skeptical you had better prepare yourself for a very short honeymoon," Ghosn said.

JOB ONE: PRESERVE CASH

Ghosn said his priority was to keep Nissan-Renault from burning cash during a downturn in global vehicle demand that shows no sign of a near-term reversal.

"I don't think anybody has a clue about if this slump is going to go through 2009, two more years, three more years. Nobody knows," Ghosn said.

During the second half of the fiscal year ended March 2009, Ghosn expected Nissan to be running close to its break even point because of slumping sales and a high yen.

"We're not at zero, but we're not far from it," he said. "We're not far from break-even.

"Our short term objective is absolutely very simple to say but more difficult to put into action -- avoid burning cash."

Ghosn supported an initial $25 billion U.S. government loan program approved in late September to help automakers offset the cost of retooling factories to produce more fuel-efficient vehicles.

Governments in Europe and Asia will likely look to offer similar support to help subsidize the development of electric cars and technology to reduce greenhouse gas emissions.

"I think the U.S. is being taken as a kind of benchmark and you will see other programs like this," he said.

"Financing for these kind of products is absolutely essential and only states can do it."

Renault-Nissan has not taken a position on the additional $25 billion bailout GM, Chrysler and Ford Motor Co (F.N) are seeking.

"We hope that they make it through a tough 2009," he said, when asked about whether Nissan might seek Chrysler assets in a bankruptcy. "I'm not going to tell you that I'm here waiting for something to happen and then jump on the carcass."

(Editing by Andre Grenon)