Nissan Not Interested in Buying Chrysler, Japanese Automaker Says
The Renault-Nissan auto alliance is not interested in buying DaimlerChrysler's loss-making Chrysler division, despite exploring a North American partnership last year, a Nissan official said Wednesday.
Tokyo-based Nissan , 44% owned by Renault of France, is always open to new partnerships, but not right now because it is focused on its own financial woes, spokeswoman Madoka Soma said.
Carlos Ghosn, head of both automakers, entered unsuccessful partnership talks with Detroit-based General Motors last year and had said a North American ally would be a good balance for the company.
But after Nissan reported a 22% slump in earnings in the October-December quarter, priorities have changed.
"As Mr. Ghosn has said, the company right now is as it is today because it has its own problems inside and we're not going outside to look for the solutions," Soma said. "We're not in a rush for a partner."
The auto industry has been pondering the fate of Chrysler since last week when its German parent, DaimlerChrysler, said it was putting all options on the table in dealing with its troubled U.S. unit. Speculation about potential partners, or even a buyer, jumping in to use Chrysler's expansive parts and dealership network to gain entry to the U.S. market has ranged from a tie-up with Nissan and Renault to talk of a link with Hyundai or even GM.
UAW Weighs In
The head of the United Auto Workers Union said on Wednesday he had no opinion about a
potential GM takeover of Chrysler.
"I have absolutely no opinion on that at all," Ron Gettelfinger told Detroit radio station WJR in a morning interview.
The comments, which were reported by Reuters, were the first from the UAW chief since reports surfaced last week that GM had been in talks on a potential acquisition of the struggling Chrysler unit from parent DaimlerChrysler.
The union's position on a possible sale of Chrysler has been viewed by analysts as one of the major hurdles facing any deal.
Gettelfinger, who sits on DaimlerChrysler's supervisory board, said the prospect of a sale of Chrysler had come as a shock to hourly workers at the struggling automaker who had expected only to hear a cost-cutting plan detailed last week.
"I know the fear, I know the anxiety, I know the frustration and worry of our members," Gettelfinger said. "Don't forget that before this term 'everything's on the table' came up, we were dealing with a restructuring announcement. People are very concerned."
Separately, Gettelfinger rejected the suggestion that the UAW would have to grant special concessions to Ford Motor in a round of contract talks set to begin this summer.
"They just went through this huge financing. They've got a ton of cash. They've got great leadership at the top of that company," Gettelfinger said. "They've made some tough decisions
but so have we. That company is in great shape."
Gettelfinger was responding to comments a day earlier from a prominent labor economist who said the UAW would face pressure to grant deep, emergency concessions to Ford as it negotiates a contract to replace the current four-year pact set to expire on Sept. 14.
But he said it was too early to speculate on the outcome of the process.
"It may end up that it's not sold. Who knows?" he said.
Sean McAlinden, an analyst for the Center for Automotive Research, said on Tuesday Ford was facing a "meltdown" with a faster cash burn than it anticipated. He estimated Ford would need combined wage and benefit cuts of up to 20%.
Gettelfinger said that view of the contract talks was speculative.
"We know there's a lot of tension out there. People are very concerned and rightfully so. But we're going to stay focused on representing our members," he said.
UAW membership has fallen to less than 600,000 from a peak of near 1.5 million in 1979. Tens of thousands of union workers have accepted buyout offers in the past year from the
struggling auto industry.
Taken together, GM, Ford and Chrysler have detailed plans to eliminate over 80,000 factory jobs in the latest round of restructuring.
While announcing earnings earlier this month, Ghosn said Japan's No. 3 automaker faced a "performance crisis" that must be fixed as "soon as possible." The company was also forced to cut its full-year profit forecast.
Renault Chief Financial Officer Thierry Moulonguet has since told investors in London that the Renault-Nissan duo isn't interested in Chrysler in any manner, the Wall Street Journal reported earlier Wednesday.
DaimlerChrysler's fourth-quarter earnings plunged 40% on weaker demand at the Chrysler unit, where sales fell 7%. Chrysler lost about $162.8 million in the period.
DaimlerChrysler has meanwhile announced plans to eliminate 13,000 jobs in the U.S. and Canada, or about 16% of its work force, and close a plant in the U.S. state of Delaware in a bid to shave costs.
In a bid to strengthen their global market position, Nissan and Renault entered talks last year with GM about forming a three-way alliance. But the talks unraveled after Nissan and Renault declined to pay a premium for reaping what GM said would have been a disproportionate share of the benefits.
Earlier this month, Renault posted a modest rise in second-half profit, but a sag in sales threatened to undermine a recovery promised by Ghosn.
Volkswagen Not in the Game Either
Meanwhile, Volkswagen told the Associated Press that it is currently not interested in acquiring Chrysler either.
"There are no such considerations at the moment," a spokesman for VW said when asked whether the company would be interested in acquiring Chrysler or expanding its partnership with the U.S. company.
Chrysler and VW agreed last year to build the mini-van model in the Chrysler production facility and sell it, bearing the VW brand.
Analysts estimate Chrysler could fetch from $5 billion to $13.7 billion, though Daimler-Benz paid $36 billion for the American icon in 1998.