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Jeep not for sale – Chrysler

Stick around: Chrysler president Tom LaSorda insists the company will not be “going under”.

Troubled carmaker denies reports it will sell the Jeep brand to Renault-Nissan

Chrysler logo15 Jan 2009

CHRYSLER boss Tom LaSorda yesterday held a special press briefing in the US to deny reports that the cash-starved automaker plans to sell its Jeep brand.

The company’s president said he wanted to make it clear that Chrysler was not looking to sell any brands, denying reported negotiations with Renault-Nissan or any other party for the sale Jeep.

However, Mr LaSorda said Chrysler planned to sell some assets, but would need approval from the government-appointed ‘car czar’ for any sale over US$100 million (A$154 million) under the conditions of the multi-billion dollar federal rescue package.

“What was reported – that we’re in discussions to sell the Jeep brand – is absolutely false,” said Mr LaSorda in the teleconference.

“It keeps coming up that Chrysler is going to sell certain brands, (but) we will not separate the brands from the company.

“If we were to sell any assets, and if you looked at the loan agreement, the loan agreement would never allow us to do that without going through the ‘car czar’.

“Under the loan agreement, any transaction over $100 million requires approval, so if you’re selling anything over $100 million, you have to seek approval from the tsar.”

While acknowledging some joint-ventures it has with Nissan, he said Chrysler has “had no discussions with Renault”.

 center imageLeft: The Russian Gaz Sebring.

Mr LaSorda, who is responsible for mergers, acquisitions, alliances and asset sales, said Chrysler was looking to raise funds through comparatively minor asset sales such as the deal with Magna International for the superseded Sebring, which was launched in Russia last year.

“In regards to discussions with other companies, including Magna, over selling assets, we’ve been on the record for over a year that we would be selling non-earning assets or assets that may be coming due based on their lifecycle. Do we have any offers to buy those assets? The answer’s no. Would we be pursuing a buyer? Yes.

“We have a relationship with Magna as our biggest supplier ... and they’ve asked us, in relation to newer platforms, would we be interested in joining them? We’ve had discussions. However, the issue is that the economy in Russia – and the United States – is so poor that we put those discussions on hold mid-last year.

“The economy here is real bad and it’s extremely bad in Russia. That’s not to say that things in the future may not turn around or (Magna) elect to invest on their own and call us back, but there are no discussions going on right now.

“Magna’s a great company, but they’re not buying any brands, nor will we sell brands to anybody else.

“There were some reports with regard to some of the Chinese being interested in specific assets (but) we have not seen any formal proposal from the Japanese, Koreans or the Chinese with regard to buying or licensing any assets, though, if they’re interested, we’d consider it.

“If somebody came to us and asked if we would consider licensing an existing platform, that would be difficult but it is something we would consider.”

Mr LaSorda would not comment on reports of a potential partial or complete sale of Chrysler, saying that was up to its owner Cerberus.

However, he remained confident of the corporation’s future, and described speculation of its potential demise as “ludicrous”.

“This company’s going to be around – we’re not going under,” he insisted.

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