Nissan Seeks Chrysler Stake

Washington DC October 22, 2008; The AIADA newsletter reported that Renault-Nissan is proposing to acquire around 20 percent of Chrysler LLC and bring the Auburn Hills automaker into the French-Japanese automotive partnership, according to sources familiar with the situation.

The offer is now before private equity firm Cerberus Capital Management, which also is in talks with GM about its Chrysler holding.

According to the Detroit News, Tokyo-based Nissan would acquire the stake because it has cash on hand, whereas Renault now has debts of more than $5 billion. Nissan and Chrysler already have several joint projects in the works, with Nissan planning to produce small cars for Chrysler and Chrysler scheduled to make the next generation Titan full-size pickup for Nissan.

But a source close to the dealings says that Cerberus founder and CEO Stephen Feinberg favors a deal with GM, viewing it as the best solution for the embattled U.S. auto industry.

However, most industry experts say such a GM-Chrysler deal would lead to drastic job cuts at Chrysler because of the huge overlap between the two U.S. automakers' businesses.

By contrast, Detroit's smallest automaker would remain largely intact as a partner in the Renault-Nissan alliance.