Thursday, July 31, 2008

Moire talks with both Fiat and Tata

NEW YORK: Automobile major Chrysler LLC is looking for ways to cut costs and also line up partnerships with foreign auto makers including India's Tata Motors to shore up its finances, a media report today said.

The Wall Street Journal quoting people familiar with the matter said, "Chrysler LLC is scrambling to slash costs and line up partnerships with foreign auto makers to shore up its finances amid a painful downturn in sales and a deteriorating outlook for the company."

Chrysler had discussions with Tata Motors about having the company sell and possibly assemble jeeps in India, the report added.

"Separately, Chrysler has had talks about leasing one of its US plants to produce cars for Italy's Fiat SpA, they said.

"Chrysler has been exploring alliances since it was acquired a year ago by Cerberus Capital Management LP, and has mapped out a deal to make trucks for Nissan Motor. Both sets of talks are preliminary and may not lead to deals," the newspaper noted.

With the deep downturn in the US vehicle sales of Chrysler, Cerberus has "become more concerned about Chrysler's ability to turn around on its own and has stepped up efforts to reach out to foreign car companies," the report said.

Further, quoting people familiar with the matter, the publication said that the talks with Tata and Fiat are taking place in parallel discussions with other auto companies.

Chrysler's US vehicle sales fell 22 per cent in the first half of the year and has worsened in recent months.

In other cost-cutting efforts, Chrysler is getting ready to offer early retirement packages for salaried employees and the offers are also part of an effort to trim its white-collar work force by 1,000, the report added.

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