Thursday, July 31, 2008

Report: Chrysler may also partner with Nissan by Mike

DETROIT (Reuters) -- Chrysler LLC is exploring a deal to make trucks for Japan's Nissan Motor Co. as part of a move to prop up the U.S. firm's finances with foreign tie-ups, the Wall Street Journal said on Thursday, citing people familiar with the matter.

In April, Chrysler and Nissan entered a deal under which Nissan would build a small car for Chrysler using the North American automaker's design and Chrysler would build a new full-sized pickup truck for the Japanese automaker using Nissan's plans.

Thursday's news comes a day after Reuters reported Chrysler is in talks with several overseas partners, including India's Tata Motors Ltd. and Italy's Fiat , according to people briefed on the talks.

Chrysler has been in discussions with Tata about arrangements to sell its Jeep Wrangler SUV in India and possibly other Asian markets.

Chrysler has also been talking to Fiat about leasing production capacity from Chrysler in North America and cooperating in retail distribution in the U.S. market, the people familiar with the talks said.

Chrysler and Nissan did not immediately return calls or e-mails seeking comment.

Private equity firm Cerberus Capital Management LP, the majority stakeholder in Chrysler, is now 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 Journal said, citing people familiar with the matter.

Chrysler is tightening spending and rethinking some development projects, the Journal said, citing people close to the company. In one such scrutiny, Chrysler is reconsidering how many of the so-called Phoenix engines it will need in the future, they said, according to the newspaper.

Chrysler has also started exploring whether other auto makers would be interested in using part of a Dundee, Mich., plant that makes four-cylinder engines, Automotive News first reported this week.

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