Nissan – Renault – Chrysler Merger?

by Robert Farago

Published: October 22nd, 2008

We’ve been largely ignoring this possibility because, well, the GM – Chrysler merger thing is a much more appealing possibility, in that “how nuts do you have to be to be a top executive for a domestic car company” kinda way. But now that it’s OK to write news reports based entirely on anonymous sources, well, why not Chrysler – Nissan? I mean, Chrysler – Nissan – Renault? I mean, Carlos “The Jackal” Ghosn? And The Detroit News is there! “The Renault-Nissan alliance 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… Sources familiar with the discussions said Carlos Ghosn, CEO of both Renault SA and Nissan Motor Co., sent a proposal in recent days that included revisions to a draft agreement prepared by Cerberus… The sources said Tokyo-based Nissan would acquire the stake because it has cash on hand, whereas Renault now has debts of more than $5 billion.” So, which company does Cerberus favor to gut Chrysler like a fish? Go ahead and jump.

“But another source close to the talks has told The Detroit News 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.” Huh? Feinbger is worried about the U.S. auto industry? Sure, and I’m concerned about an asteroid strike.

Anyway, the DetN’s source’s speculation raises an important question: would the Renault – Nissan – Chrysler deal be better for the American auto industry? The reporters certainly seem to think so. “By contrast, Detroit’s smallest automaker would remain largely intact as a partner in the Renault-Nissan alliance. It would participate in the joint purchasing, vehicle platform development and other programs, slashing its costs. But it would have its own management and retain its brands. There is little overlap among Renault, Nissan and Chrysler brands in most of the world.” Sure, makes sense to me. Full Chrysler Suicide Watch later today.

Robert Farago

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2 of 22 comments

Lynn Ellsworth on Oct 22, 2008
In the future I see cars sold on Amazon.com. I don’t. Cars are too expensive to sell themselves. Most customers need to be convinced to take the plunge and sign the papers. Sears tried to sell cars through its catalog and failed. The internet is a big improvement over a one-sided catalog. Many of the first companies that built cars and computers failed but others kept trying and succeeded. Hopefully many have realized that they were convinced to buy more car and more loan than they should have and will be more realistic in the future. I still feel that dealers are obsolete, expensive, a clumsy way to sell, and potentially annoying to the final customer. We should keep our minds open and not assume the way things were done in the past will continue.

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Hughie522 on Oct 22, 2008

Further proof that, "Those who do not learn from history are doomed to repeat it." As with the U.S. federal government bailing out Chrysler before, another French carmaker (Peugeot) bought Chrysler Europe for $1 in the 1980s, resurrected Talbot, was unable to sell the damn thing and then did a, "Let's call the whole thing off." *Sigh*

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