While co-president Tom LaSorda denied Wednesday morning that Chrysler would ever consider selling Jeep or its two other brands to another company, he had no answer on the potential sale of Chrysler LLC as a whole. “That’s all done at the Cerberus level,” he told reporters on a conference call.
Last year, Chrysler LLC and Nissan Motor Company were in talks to form an alliance like Nissan’s with Renault. Cerberus Capital Management, the three-headed Chrysler-owner from hell, rejected the deal, however. It appears Cerberus is only interested in an outright, full sale of the 81.1% of its unloved stepchild.
Now, under Chrysler’s acceptance of $4 billion in federal loan guarantees granted late last year, it must seek U.S. Treasury (and soon, car czar) approval for any asset sale of more than $100 million.
This all came up after the North American International Auto Show press days ended when published reports noted a.) Magna International, which lost a bid to Cerberus to buy Chrysler in 2007, hired Wolfgang Bernhardt to work on its Russian business and b.) rumors resurfaced that the Nissan-Renault alliance was in talks to buy “key assets,” such as Jeep, from Chrysler.
So there is no basis for the Nissan-Renault rumor, aside from the fact that American Motors built Renault Alliances in Kenosha, Wisconsin, when it owned Jeep. Cerberus’ rejection of any alliance between Chrysler and Nissan last year no doubt has put the Japanese automaker off any serious talks. In any case, Nissan-Renault, like the rest of the corporate world, has no extra cash or credit lying about to buy anything substantial, right now. Whatever you think of him, Carlos Ghosn is too smart for all that.
The Magna implications are more complicated. Ford Motor Company has just signed an alliance with Magna to build electric vehicles for the Dearborn automaker. Magna Steyr, a Magna International subsidiary, assembles cars and trucks for several different manufacturers in Europe, so there’s no real issue over dealing with several competitors.
In May 2007, Magna announced it would sell half its shares to a company owned by Oleg Deripaska, then Russia’s second-richest man. Forbes later named Deripaska Russia’s richest man, but by last fall, he had just 20% of Magna. Then he had to surrender it all to creditor BNP Paribas SA on a margin call.
Basic Element, Deripaska’s holding company, also controls Russian automaker OAO GAZ and United Co. Rusal, the world’s largest aluminum producer, according to Canada’s Financial Post (which spells it “aluminium,” of course). GAZ, you may remember, bought one asset from Chrysler LLC last year: tooling for the better-looking, last-generation Chrysler Sebring sedan (GAZ pictured above).
LaSorda said Wednesday that Chrysler will try to sell tooling for its Chrysler PT Cruiser, which goes out of production this summer. That’s not much of a fund-raiser - such tooling would go for well under that Treasury department minimum of $100-million.