GM Inside News Forum banner
1 - 4 of 4 Posts

·
Registered
Joined
·
4,225 Posts
Discussion Starter · #1 ·
Oct. 23 (Bloomberg) -- Nissan Motor Co., Japan's third- largest carmaker, isn't willing to put up cash for an alliance with Cerberus Capital Management LP's Chrysler LLC, according to two people with knowledge of the matter.

Nissan, with 453.8 billion yen ($4.6 billion) in cash, won't consider a tie-up that weakens its financial position, said one of the people, who asked not asked not to be identified because talks between the companies are confidential.

``Any deal that used Nissan's cash would be viewed negatively as increasing risk, at a time when they should be reducing it,'' said Michael Tyndall, a London-based analyst with Nomura Securities, which has a ``neutral'' rating on Nissan. ``A share-swap certainly seems to be one option.''

While Nissan is profitable, it might be forced to tap its reserves should a global recession crimp sales.

Tokyo-based Nissan offered to acquire 20 percent of Chrysler and bring the U.S. automaker into its alliance with Renault SA, the Detroit News reported yesterday.

Cerberus, already said to be in talks with General Motors Corp., has been exchanging proposals with Nissan, a third person familiar with the negotiations said today. Chrysler had $11.7 billion in cash as of June 30, which the company is using to cover operating losses.

Chrysler-Nissan Ties

Chrysler and Nissan agreed this year to build pickups and small cars for each other and said the partnership may expand. Simon Sproule, a Nissan spokesman in Tokyo, declined to comment and Lori McTavish at Auburn Hills, Michigan-based Chrysler said the company doesn't discuss private business meetings. Renault's Frederique Le Greves said it wasn't in any talks with Chrysler.

Carlos Ghosn, chief executive officer at both Nissan and Renault, failed to persuade Detroit-based GM, the biggest U.S. carmaker, to join the alliance in 2006 and said on Oct. 2 that he was still seeking an American partner.

Ghosn also declined to reiterate sales and earnings targets for Renault and said missing them in an auto-market slump shouldn't put his job on the line. Renault has pledged to give an update on full-year targets when it publishes third-quarter revenue later today.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aEjY_BYmoGvc&refer=home
 

·
Registered
Joined
·
4,822 Posts
IF GM decides to go down this road and merge with Chrysler, maybe then can turn around and sell part of it to Nissan. Of course, thats kinda tough with Goshn unwilling to spend any cash... not that I blame him.
 

·
Registered
Joined
·
15,633 Posts
They have a sense of what's coming and want to stay liquid.

Given some of the very real possibilities concerning the future market, even Toyota with that humongous amount in the bank and that marvelous internal crown ' fund structure' is only going to have about a tenth of what's needed.

Nissan Renault have way less than that.

Its quite possible we will see Cerebus making some total desperation moves that 'seem' self destructive over the next couple of days , or weeks, or months.

That will be explainable later and will be seen as gettin' what they could into the life boat.

This does include the possibility of a very sloppy, inefficient, and destructive dis memberment of Chrysler that's brutally quick.

That will reflect poorly on them and the world and not Chrysler and its employees and their efforts.
 

·
Registered
Joined
·
17,579 Posts
The magnitude of the unwinding global crisis actually depends mostly on the extent of doom and gloom we buy. Nissan hoards cash not because they know what's coming, but because they don't. Nobody actually does, but the more people "know" it is going to get bad, the worse it gets. Cerberus does not quite know whether holding on to Chrysler would prove more profitable in the long run than crashing it into GM, but they are quite certain how the transaction will affect their books today, so they are going for momentatry gain.
 
1 - 4 of 4 Posts
Top