Chrysler won't profit in '08, Nardelli says

Chrysler Chairman and CEO Bob Nardelli said the Nissan deal will allow Chrysler to expand its global reach.

Nissan to help with small-car lineup

BY BRENT SNAVELY • FREE PRESS BUSINESS WRITER

While Chrysler LLC hit all of its financial targets in the first quarter of 2008, the Auburn Hills automaker won't make a profit this year, the company's chief executive said Thursday.Bob Nardelli made the comments following his speech at the Society of Automotive Engineers annual banquet dinner in Detroit.

Chrysler executives were in New York City earlier this week to meet with officials of majority owner Cerberus Capital Management. Chrysler lost $2.9 billion on operations and restructuring costs last year, internal numbers seem to indicate.

Nardelli also discussed the announcement earlier this week to team up with Nissan to produce pickups and small cars. He said during the speech that the plan is part of the automaker's strategy to pump up its small-car lineup and its international expansion.

"Expanding our global business also makes us stronger in our home market, because it helps balance out the ups and downs in the North American economy," Nardelli said Thursday night.

Under the deal announced Monday, Nissan will use its Oppama plant in Japan to build a Chrysler-designed small car for the Auburn Hills automaker to sell in North America, Europe and elsewhere beginning in 2010. Chrysler plans to use its Saltillo, Mexico, plant to assemble a Nissan-designed pickup for the Japanese automaker to sell in North America starting in 2011.

"This small car will bring us into a new segment and will help us meet increased demand for better fuel economy and reduced CO{-2} emissions," Nardelli said in his first public comments about the Nissan deal.

Nardelli was the keynote speaker at the conclusion of SAE 2008 World Congress, a four-day conference for automotive engineers.

After his speech, Nardelli said he has a tremendous amount of respect for Carlos Ghosn, the CEO of the Nissan-Renault alliance.

"What I am really pleased about is the quid pro quo -- the ability to purchase and sell and try to balance manufacturing capacity, engineering and technology between our two companies," Nardelli said.

Nardelli also said Chrysler President and Vice Chairman Tom LaSorda is leading the effort to explore the possibility of additional deals with Nissan.

The Nissan agreement is just one of several pending or potential partnerships between Chrysler and other automakers.

In January, Nissan and Chrysler agreed to a deal in which Nissan will build a small car based on the Nissan Versa for Chrysler to sell in Brazil in 2009.

The German business newspaper Handelsblatt reported Tuesday that Chrysler and Fiat Group are in talks for the U.S. company to make vehicles for Fiat subsidiary Alfa Romeo in its U.S. plants.

But Nardelli quashed those rumors Thursday, saying there are no talks occurring between the two companies.

Chrysler also is working with Chery Automobile Co. on a deal that would have the Chinese company build small cars for Chrysler to sell under its own brand in markets around the world.

The deals also help Chrysler gain global scale. Chrysler, the smallest of the Detroit Three, operates 14 assembly plants, 10 powertrain plants, three stamping operations and seven technical centers -- all in North America. It also has seven manufacturing affiliates outside of North America.