Vice chairman and president Tom LaSorda has strongly denied media reports and industry rumours Chrysler is in talks to sell to sell its Jeep brand, any manufacturing plants or the tooling for an existing vehicle line.
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“What was reported that we’re in discussions to sell the Jeep brand is absolutely false,” LaSorda told reporters during a conference call on Wednesday.
“We will not separate the brands from the company.”
He said the company has said for more than a year that it would sell non-earning assets, or assets that “may be coming due.”
LaSorda confirmed Chrysler had had discussions about selling the tooling of previous generation vehicles, or discontinued vehicles but said reports the company would sell one of its manufacturing plants were untrue, and didn’t make sense.
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By GlobalData“If we were to sell any assets, and if you looked at the loan agreement, the loan agreement would not allow us to do that without going through the [US federal government] ‘car czar’,” he added.
Chrysler had early been reported to be talking with major auto and component makers in France, Canada, Japan and China over the possible sales.
Canada’s Magna group was considering buying the Belvidere, Illinois, assembly plant, Chery Automobile and Guangzhou Automobile were eyeing PT Cruiser model rights and tooling and Chrysler was also talking with the Renault-Nissan alliance about deals that could include the sale of the iconic Jeep brand, Reuters said, citing “people with knowledge of the discussions”.
Renault had immediately dismissed the report.
“We’re denying those talks,” a spokesman told just-auto earlier on Wednesday. “That is the line we’re taking.”
Renault and Nissan late last year had some discussions with Chrysler (never officially confirmed) about buying some or all of the privately-held US automaker before the federal government offered bailout loans at the end of 2008.
Talks gathered momentum in recent weeks and had included discussions of a Jeep deal, “three people with knowledge of the talks” told the news agency.
Renault needed to clarify whether a deal to acquire Chrysler assets would jeopardise the company’s access to US government funding, one of those familiar with the talks said.
Chrysler was discussing the sale of the Belvidere plant to Magna International with the condition cars built there were supplied to Chrysler, Reuters said.
The plant builds the Dodge Caliber compact hatchback and Jeep Compass and Patriot small SUVs which share platforms and drivetrains. It was extensively updated for these models in 2005 and is considered one of the automaker’s best and most most flexible factories.
Magna assembles some vehicles, such as the Chrysler 300C and Jeep Grand Cherokee, under contract to the US automaker at its Austrian plant, Magna Steyr, though Chrysler shifted export minivan production back to the States with the last model changeover.
Chrysler chief executive Bob Nardelli earlier this week denied he was preparing the struggling automaker for sale while Renault-Nissan alliance head Carlos Ghosn has repeatedly said he would not consider a deal that would involve spending cash in an uncertain market.
Chery last month ended discussions with Chrysler over a plan to build a small Chrysler-badged car for sale in South America.
Separate model-sharing deals with Nissan to build larger cars for North American sale while Chrysler supplies Nissan-badged derivatives of its large pickup line in return are understood still to be proceeding.
Chrysler had previously said it would drop the PT Cruiser convertible and will now dump the entire Mexico-built line at the end of the 2009 model year – production ends next summer of a model line that dates back, almost unchanged, to 2000. Export sales have largely stopped; the line was axed here in the UK some time ago.
Chrysler wants over US$100mn for the PT Cruiser tooling and brand rights from a deal that would see one of the Chinese firms make the model in China for sale there, the three sources told Reuters.
“Would we sell those assets? The answer would be yes, ” LaSorda said. “Do we have any offers to buy those assets? The answer’s no. Would we be pursuing a buyer? Yes.”
A Guangzhou Auto spokesman told the news agency he was not aware of any Chrysler talks but did not rule out interest in overseas assets.
Chrysler recently sold previous generation Chrysler Sebring/Dodge Stratus tooling to Russian magnate Oleg Deripaska’s Russian Machines which, with plant setup help from Magna International, in which he briefly held shares, is now building updated versions branded the Gaz Siber for sale in Russia.
LaSorda said Chrysler had talked with Gaz about selling newer models but the economies of Russia and the US were currently so poor, “we put those discussions on hold”.
Meanwhile, Tennessee Republican senator Bob Corker, who opposed the federal bailout loans for Chrysler and GM, has said Chrysler could be made more viable by merging with a larger rival.
“They probably would be better if they were attached to a larger platform,” Corker told Reuters at the Detroit show this week.
