[nadepalma]

SOURCE: DetNews.com

A Ram in Nissan's future?
Some auto analysts say sale of Chrysler's Dodge truck business makes sense.
Alisa Priddle / The Detroit News
Wednesday, October 22, 2008

Nissan Motor Co. needs full-size trucks and Chrysler LLC could spin off a chunk of its Dodge truck business to fill that need, analysts say.

Despite high gasoline prices, there remains a market for large pickups and SUVs in North America. But Nissan does not want to invest heavily in developing its own new platforms to continue offering vehicles in these segments, given low volumes of the current Titan pickup and Nissan Armada and Infiniti QX56 SUVs.

Chrysler could "sell Dodge trucks to Nissan and just deal with cars," said Joseph Phillippi, principal at AutoTrends Consulting.

Manufacturing consultant Laurie Harbour-Felax, president of the Harbour-Felax Group, took the idea a step further. She envisions General Motors Corp. buying Chrysler from Cerberus Capital Management LP, keeping the Jeep brand and minivans, and packaging the Ram complete with its stamping, powertrain, transmission and assembly plants, for sale to a third party such as Nissan.

Chrysler has 13 facilities and about 16,000 employees who contribute to the assembly of the Dodge Ram pickup and Durango SUV -- all of whom would like to keep their jobs should a deal to sell Chrysler lead to an asset sale.

Chrysler workers are already poised to build Titans for Nissan in two years. And the product agreement, one of several between Chrysler and Nissan, could deepen into a more extensive relationship as the Renault-Nissan alliance has submitted a proposal to buy a stake of about 20 percent of the Auburn Hills automaker.

So far, Nissan has only cemented product agreements. The Japanese automaker introduced the Titan pickup in 2003, but it never reached its potential, selling less than 66,000 in 2007 with sales down another 42 percent through September. It was relegated to a niche vehicle that did not warrant investment in a new platform when the current truck ceases production in 2010. Instead, Nissan entered into an agreement under which Chrysler will use the architecture of the all-new 2009 Ram to build the next-generation Titan for sale in 2011.

Nissan is still designing the next Titan -- the name may change -- but its underpinnings will be all Ram for ease of assembly at Chrysler's Saltillo, Mexico, plant. Nissan is expected to take advantage of more engines, including a V-6, Hemi V-8 and Cummins diesels, as well as more cab configurations offered by the Ram platform. The partnership does not extend into heavy-duty pickups as Nissan is entering the light-commercial vehicle (LCV) market in North America in 2010 and a heavy-duty Titan would come from the LCV division.

As analysts dissect what may be salvageable among Chrysler's assets, they see full-size trucks, complete with their plants and workers, as a potential spin-off.

Included in the package would be the Dodge Durango SUV to replace the Armada. That would dovetail with Nissan product plans as the Japanese automaker plans to stop building the SUVs in Canton, Miss. Production of the QX56 will move to Japan where its replacement will come from a new luxury truck platform shared with the Nissan Patrol SUV, a well-revered off-roader that is popular in other parts of the world.

But the Armada isn't making the same move and its fate remains uncertain. Which raises the possibility of the Durango to the rescue.

It is in keeping with the view among Nissan officials in Japan who have said platform sharing is a good move for Nissan for low-volume vehicles where the amortization costs of a new platform can be largely borne by another automaker.

MORE HERE

 

[wescoent]

This makes no sense. It would still involve closing Chrysler dealers, the costs of which will run into the billions.

Now, if Nissan bought the Ram tooling, engineering, and such, and then entered into an agreement to keep building the Ram for Dodge dealers, we might be on to something.

 

[ChevyRules]

They can sell it if they want, but take the Cummins first before selling it.

 

[HoosierRon]

This makes no sense. It would still involve closing Chrysler dealers, the costs of which will run into the billions.

If Chrysler LLC sells all of its assets (piecemeal or otherwise), and does not sell ownership of the company itself, and then declares bankruptcy, it would not cost anyone anything.

 

[stevecmh]

They can sell it if they want, but take the Cummins first before selling it.

agreed on that one.. also Chrysler bought Allison transmissions from GM a while back.. take that too..

but i do kinda like Jeep as a GM product.. but def. kills Hummer.

 

[PhishPhood]

Yes if the wording is accurate then it seems that GM would be buying the Chrysler 'business' ( including presumably the Chrysler dealership agreements ) but then selling the truck-making assets to NR. It would be GM that's responsible and on the hook to do away with the Chrysler dealerships. It would be GM taking the heat. It would be GM - the killer. For this they would have to exact a pretty penny from Cerebus to keep 'the money changers' out of the spotlight.

It's Cerebus pulling the strings here methinks. GM is the puppet. But GM may come away with several $Billions after all is said and done - and one less competitor to share the govt bailout with not to mention one less competitor in the market.

The rest of the market says 'Thank you GM for doing the right thing'.

 

[GMforME]

and jeep and hummer are merged and spun off as a seperate company or sold.(remember Gm appointed a CEO for the hummer brand, you don't appoint a CEO for a brand unless its being spun off or merged and sold)
Gm keeps the minivans and the rest of the line is closed up and or sold off.

 

[Michael_S]

If Chrysler LLC sells all of its assets (piecemeal or otherwise), and does not sell ownership of the company itself, and then declares bankruptcy, it would not cost anyone anything.

I'm sure it's tempting to the Chrysler executives and Cerberus.
"Here's the plan: sell the truck platforms, engines, and technology and give ourselves bonus checks. Sell the Viper as a brand and give ourselves bonus checks. Then sell Jeep and give ourselves bonus checks. Then shop around our minivans to GM, Ford, Volkswagen, and anything else that might want them, and if somebody buys, give ourselves bonus checks. Our shares will be worthless, but we can make sure our bonus payments after each sale are in cash. Then declare bankruptcy and shortly later, liquidation, and f*** the employees and shareholders."

Don't get me wrong, I would be shocked if Chrysler can survive as an independent company. But I'm very cynical that the leadership will ruthlessly milk what is left of it for their own personal gain before abandoning ship.

 

[zete]

This makes no sense. It would still involve closing Chrysler dealers, the costs of which will run into the billions.

Now, if Nissan bought the Ram tooling, engineering, and such, and then entered into an agreement to keep building the Ram for Dodge dealers, we might be on to something.

All Cerberus has to do is declare Chrysler bankrupt and then sell the assets pennies on the dollar to whomever they choose. The dealers would have to take the hit and would have no one to sue or seek compensation from.

This scenario makes sense and it could be as simple as GM buying all of Chrysler and then selling the trucks to Nissan. That way GM could cut a deal to keep any engines, designs, etc. it wishes and sell a copy to Nissan. I think GM did that with an engine years ago that has evolved into the current 6 cylinder engine in many Nissans, including the Maxima and 350.

 

[GMforME]

And the government will intervene in this deal because if they don't the PBG fund takes a hit for 125,000 chrysler retirees which ultimatly will cost the taxpayers more than the government interceding and supporting the funding of the split up /mergers

 

[wescoent]

All Cerberus has to do is declare Chrysler bankrupt and then sell the assets pennies on the dollar to whomever they choose. The dealers would have to take the hit and would have no one to sue or seek compensation from.

It's NEVER that simple. They can ALWAYS find SOMEONE to sue, no matter how much of a stretch.

 

[HoosierRon]

I'm sure it's tempting to the Chrysler executives and Cerberus.
"Here's the plan: sell the truck platforms, engines, and technology and give ourselves bonus checks. Sell the Viper as a brand and give ourselves bonus checks. Then sell Jeep and give ourselves bonus checks. Then shop around our minivans to GM, Ford, Volkswagen, and anything else that might want them, and if somebody buys, give ourselves bonus checks. Our shares will be worthless, but we can make sure our bonus payments after each sale are in cash. Then declare bankruptcy and shortly later, liquidation, and f*** the employees and shareholders."

Don't get me wrong, I would be shocked if Chrysler can survive as an independent company. But I'm very cynical that the leadership will ruthlessly milk what is left of it for their own personal gain before abandoning ship.

Your plan is not tempting. If executives of a company personally take the value of the company for themselves before declaring bankruptcy, the court will consider it a fraud on the creditors, and the bankruptcy estate trustee will take back from the executives what they took from the company.

 

[zete]

It's NEVER that simple. They can ALWAYS find SOMEONE to sue, no matter how much of a stretch.

That's true, but in this climate it becomes much harder for most of them to sue as they'd prefer to retain cash.

I've always found that those with deeper pockets tend not to care if there's a threat of a suit knowing full well they can bury you under paper and wait you out.

 

[moon111]

Dodge trucks were a pathetic entity (sales-wise) until they redesigned them to make them look tough. Chevy and Ford looked like toys beside them then. But the Hummer has that Arnold Schwarzenegger appeal. Sell Dodge trucks off, who cares? Once owned my Nissan, it's image will be tarnished. And if there was a tough as nail Hummer truck? Old Dodge truck fans would migrate. Just don't ask them to buy a Chev, even if it's the same thing.

 

[texassierradude]

All Cerberus has to do is declare Chrysler bankrupt and then sell the assets pennies on the dollar to whomever they choose. The dealers would have to take the hit and would have no one to sue or seek compensation from.

This scenario makes sense and it could be as simple as GM buying all of Chrysler and then selling the trucks to Nissan. That way GM could cut a deal to keep any engines, designs, etc. it wishes and sell a copy to Nissan. I think GM did that with an engine years ago that has evolved into the current 6 cylinder engine in many Nissans, including the Maxima and 350.

As usual, zete is spot on in his assessment. I suspect that Chrysler is worth more in pieces than as a whole. Having said that, I feel that Jeep has enough brand equity to be retained by GM as a useful entity. Possibly the minivans (Chevy Caravan? Buick Town & Country?) would be worth keeping as well by GM as well. I also wonder if the Chrysler dealer organization would be worth something, at pennies on the dollar, to someone like Hyundai/Kia?

 

[sepi]

This would be a loss for GM - Dodge's trucks are now nicer than anything GM sells and leaving GM with Chrysler's cars isn't a delightful proposition to say the least! Stripping Dodge trucks out leaves only Jeep as a brand of value - I guess if GM is so desperate for cash, it will do anything. I wonder how it is that GM will pull this off. Their management is the dumbest, least clever, laziest on the planet and I don't see adding more to their responsibilities as being less than shoveling more dirt on the corpse of GM.

 

[dufus22]

this could make sense nissian gets the trucks, and then the chinese could buy the dealers for instant access to the NA market. Everyone wins, except the employees, and the American dream

 

[jlt0x]

This would be interesting. I'd rather for GM to buy Chrysler first, then partner with Nissan to use the Ram platform for their next Titan and maybe a new Armada. It would be win-win unless Nissan plans to assemble the Ram-based vehicles in their own facilities. But I don't see why using "un-used" Dodge capacity wouldn't be an issue.

 

[Hudson]

They can sell it if they want, but take the Cummins first before selling it.

Cummins is not owned by Chrysler LLC.

 

[jbartley]

agreed on that one.. also Chrysler bought Allison transmissions from GM a while back.. take that too..

but i do kinda like Jeep as a GM product.. but def. kills Hummer.

that's why hummer is for sale...