Rumor has it that parts supplier Magna International, and car makers Renault/Nissan are in talks to buy Chrysler, or some assets. Chrysler denies the rumor, which also says that Jeep is up for sale.
Canadian auto parts supplier Magna International is rumored to be in talks to purchase Chrysler. Speculation about the purchase has been fueled by the parts-maker's decision to hire Wolfgang Bernhard as a consultant.
The 48-year-old Bernhard, a former Chief Operating Officer at Chrysler, has been around the auto industry for quite some time. He was at one point CEO of Mercedes AMG, and recently sat on the Board of Directors at Volkswagen
But it is his former role at Cerberus Capital Management that sits as the basis of the rumor. He worked with the venture capital firm to create a bid for Chrysler. They were successful, taking over majority control of the automaker from DaimlerChrysler in 2007. Many consider Bernhard to have been the wildcard that gave Cerberus the winning bid. He was rumored to become their choice for CEO of the automaker. Instead, Bob Nardelli was chosen to head up the company.
Magna has previously expressed interest in owning some - or all - of Chrysler. They openly have stated their desire to own a complete vehicle assembly plant in North America. In Europe, their Magna Steyr company manufactures complete vehicles for other car makers. Magna wants to do the same thing across the pond, and a purchase of a Chrysler facility would be cheaper than building a new manufacturing plant from the ground up.
It has also been rumored that Renault/Nissan wants control of the American company, or at least some of its brands. A Reuters article from earlier this week quoted unnamed sources at Chrysler saying the Detroit Big 3 company wanted to sell off the entire Jeep brand, the PT Cruiser line, and its plant in Belvidere, Illinois. That plant manufactures the Dodge Caliber and two other Jeep models. The Reuters article also states that Chrysler was considering giving control of their entire production to Magna.
Chrysler shares several technologies and platforms with Nissan already, and the two companies have entered into agreements to build vehicles for each other. Magna is one of Chrysler's major parts suppliers, including parts for the vehicle share with Nissan. Although Magna has never made a complete vehicle for Nissan, Magna Steyr currently builds the Chrysler 300C, Jeep Commander, and the Jeep Grand Cherokee.
As both Magna and Renault/Nissan are so heavily tied up with Chrysler, they may both want to purchase the troubled automaker to make sure they stay in business. Chrysler, who has a poor level of liquid cash and has been teetering on bankruptcy, recently received a $4 billion bailout loan from the U.S. government.
Publicly, representitives from the automakers deny the rumors, with Nissan spokesman Fred Standish telling the Detroit Free Press, "The only thing that Nissan and Chrysler are talking about is the three product-sharing deals announced last year."
"We are open to further product-sharing projects," he said.
Meanwhile, Chrysler President Tom LaSorda is vigorously denying the rumors, saying, "We will not separate the brands from the company." In a media conference call he reminded reporters that any large deals would have to be approved by the U.S. government, as part of the bailout conditions.
LaSorda did confirm they would consider selling off the PT Cruiser line, but they do not have any offers on the table.
Cerberus and Magna have not commented on the subject.