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Nissan ends talks with Chrysler

by Bill Cawthon on

The Detroit News reports that talks between the Renault-Nissan alliance and Cerberus Capital Management have ended. While future discussions have not been ruled out, sources say Cerberus would prefer to come to an arrangement with General Motors.

Neither automaker would comment, but those with knowledge of the negotiations say Cerberus believes a GM-Chrysler deal would be financially more advantageous as well as a better outcome for the U.S. auto industry. Renault-Nissan had proposed a taking 20 percent stake in Chrysler but it is said the two sides could not come to an agreement on a fair value for the Auburn Hills-based automaker. Carlos Ghosn, Renault-Nissan’s CEO, had ruled out large cash payments because of current economic conditions and the state of the automobile industry.

A GM-Chrysler merger had been viewed as almost a done deal until the Bush Administration ruled out government participation late this week. GM had been seeking as much as $10 billion in direct federal investment to finance the takeover which one consultant said could cost as many as 200,000 jobs and drive numerous companies out of business. GM officials reportedly are still trying to work with various government agencies, hoping to make a deal before a new administration and Congress are sworn in next January.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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