Wednesday, October 22, 2008

Detroit News---GM To Sell Dodge To Nissan???

Some auto analysts say sale of Chrysler's Dodge truck business makes sense.

Alisa Priddle / The Detroit News

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.

Harbour-Felax said a Chrysler package could include assembly plants in Newark, Del.; Warren; St. Louis; and Saltillo; some of which have on-site stamping. Powertrain plants in Saltillo and Detroit, and transmission assembly in Kokomo, Ind., could be included.

"You'd be selling a potential of nine or 10 plants," that might otherwise be closed if a new owner of Chrysler deemed them redundant, she said. Adding casting and axle plants, there are 12 facilities that contribute to the Ram and Durango, among other products.

While such an asset sale would solve some of Nissan's future product problems, it would also force new adjustments as the Japanese automaker would find itself managing its first unionized facilities, Harbour-Felax said.

In another pending piece of reciprocity, Nissan will build a Chrysler-designed small car for North America in 2010. And there is talk of a Chrysler sedan based on the Altima.

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