Chrysler Ceases Talks With Nissan-Renault In Favour Of GM

Both General Motors and Nissan-Renault have been in discussions with Chrysler in recent times as the troubled US manufacturer continues to take on water. The prospect of a GM/Chrysler merger is now looking more likely. Chrysler has stated that no further talks have been scheduled with Nissan-Renault as Chrysler's owner, Cerberus Capital Management, feels that GM has more to offer.

Nissan-Renault had proposed acquiring 20 percent of Chrysler, whereas GM proposes to acquire the whole box and dice (provided it can secure financing). As everyone knows, GM is also in dire trouble. It sees Chrysler as one way out of its current mess: it would give GM a larger slice of the US$25billion promised to the US motor industry by the Bush administration, and would allow plant and model rationalisations - thus reducing costs going forward.

Certainly, as far as Cerberus is concerned, Nissan-Renault CEO Carlos Ghosn's comments that a deal between the two does not make sense during these troubled economic times, is unlikely to have helped matters any.

Cerberus prefers GM. In its view GM has more to offer, and a merger with the Detroit-based manufacturer may gain additional support from government. There is also a much better alignment between each company's goals and product offerings.

A merger with GM appears the more logical proposition. If we're really lucky here, it might mean we see some more exciting products wearing the Chrysler/Dodge badge hitting these shores. Like where's our Dodge Charger?