Chrysler will focus on partners, not merger

updated 9:32 p.m. ET Jan. 13, 2008

DETROIT - While Chrysler LLC says it will not rule out another combination like its nine-year marriage to Daimler AG, its focus is on partnerships with various automakers to expand its worldwide sales.

"We're going to seize any opportunity there is out there. We have the advantage of not being wedded to any particular strategy or particular infrastructure," Chrysler Chairman and Chief Executive Bob Nardelli said Sunday at the North American International Auto Show.

Under a deal announced last week, Nissan Motor Co. will build subcompact cars for Chrysler for the South American market starting next year. That comes on top of several other alliances Chrysler has already struck with other automakers.

Chrysler is building a minivan for Volkswagen AG that will hit the market in the third quarter of this year, and it has an agreement with China's Chery Automobile Co. to jointly produce and export small cars to Western Europe and the United States in the next few years. Chrysler also has an engine alliance with Hyundai Motor Co. and Mitsubishi Motors Corp., and it still works closely with Daimler on advanced technology.

Chrysler's sales outside North America jumped 15 percent in 2007, to 238,218. But with just 9 percent of the company's sales coming from outside North America, the company is far behind its rivals. Around 60 percent of General Motors Corp.'s sales come from outside the United States.

Tom LaSorda, the vice chairman who is leading Chrysler's efforts to break into global markets, said it's difficult to say whether Chrysler would be better merged with another partner or forging relationships with many automakers.

"Should you go with one or two and forget about the rest? I don't know that we're ready to answer that because of the differences in each of the regions," he said Sunday.

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He also pointed out that Daimler retained a share in Chrysler after the private equity firm Cerberus Capital Management LP bought a majority stake in Chrysler last summer.

"We already have Daimler with 19.9 percent. How many people do you want to work on this? It really makes it difficult," LaSorda said.

He added that having another automaker buy Chrysler is not a priority of Cerberus.

"You can't close an idea down, but Cerberus isn't saying, 'Hey, can you go find out who would like to buy us?'" he said.

Nardelli said Cerberus was pleased with Chrysler's performance in 2007 and said it met or exceeded many of its internal targets. Chrysler no longer reports earnings since it is a private company.

He said the company also managed to hold onto its 13 percent U.S. market share despite a struggling market. GM and Ford Motor Co. both lost share.

"We did deliver in 2007," he said.

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