Could Chrysler Merge With Nissan?

by Tim Joseph

There have been a lot of talks lately about Chrysler and thier future. GM and Chrysler are talking about a possible merger or takeover. Cerberus seems to want to get out of the auto business and now may be a good time. A deal like this would be good for GM because it could reduce their operating costs substantially. Now there are rumors that Renault-Nissan have had talks to buy Chrysler. The rumors go as far as saying that Nissan Executives have been to the United States and have even toured the Chrysler World HQ in Auburn Hills. Carlos Ghosn is said to have a team in America analyzing the potential purchase.

While Renault spokespeople have denied any such talks, Nissan had this to say. "We have three deals with Chrysler right now, for some cars and trucks, that have been reported earlier this year," said Fred Standish, spokesman for Nissan North America. "We are keeping lines open with Chrysler to discuss any other potential future deals. But we have nothing to announce right now."

A simple "We cannot confirm nor deny that" would have been sufficient.

"I think that when people talk about consolidation, they imagine company A buying company B. We know this does not work," Ghosn said at a grand opening celebration of the company's new North American headquarters in Nashville, Tenn. "Company A buying company B is guaranteed destruction of value after a while."

Ghosn went on to say that strategic alliances such as Renault-Nissan do work. Nissan owns 15% of Renault while Renault owns 44% of Nissan.

In July Ghosn commented on a possible Chrysler-Nissan alliance by stating "With Chrysler, we have OEM deals like we have with Mitsubishi, like we have with Suzuki," Ghosn said. "Nothing more nothing less." While earlier this month Bob Nardelli was reportedly quoted as saying he has met with Carlos Ghosn several times and Renault-Nissan could be a "strategic buyer" for Chrysler.

Most analysts agree that the Renault-Nissan-Chrysler deal makes more sence than selling to General Morots. Cerberus apparently doesn't want to break Chrysler up and sell it in pieces. I guess we'll have to wait and see.