The Auto Writer

The Chrysler LLC saga continues with one thing quite apparent: any sort of sale of the automaker, whether it is done in pieces or lock, stock, and barrel, won’t happen easily. Credit a global economic downturn with being a big reason for making any sale less than desirable along with the unmistakable fact that Chrysler’s reach overseas is limited.

Nissan and its French partner, Renault, might be a good match for Chrysler especially given the slew of partnership agreements made between Chrysler and Nissan earlier this year. However, Renault/Nissan CEO Carlos Ghosn has made it clear that neither company is interested in Chrysler beyond forging key partnerships.

General Motors has had its eye on Chrysler, primarily to gain the Jeep brand as well as to absorb the company’s minivan franchise. Neither Ford nor GM has a footing in the minivan market, something that could be quickly regained with any takeover. Just last week GM management said that they called off talks with Cerberus in a bid to concentrate on shoring up its own floundering operation.

With these recent moves parent Cerberus Capital Management, LP is discovering that a sale of Chrysler LLC may not happen, unless federal intervention is offered first. Coinciding with the recent election of ultra-liberal Barack Obama and the expansion of the Democrats’ hold on both the Senate and the House, the federal tap may soon be opened wide to assist the beleaguered US auto industry.

That move could suddenly make Chrysler LLC attractive to any buyer, especially if the federal government finds a way to trim excess plant capacity while helping to retire tens of thousands of workers who would no longer be needed to run the scaled back operation. Likely, any government assistance would come with strings attached, requiring Chrysler to maintain as many jobs as possible, a feat that could prove difficult as demand for its products continues to slide.

A white knight, in the form of Korean auto giant Hyundai, has been rumored to be interested in Chrysler LLC, particularly the Jeep brand. Hyundai, which is now the fifth largest automaker in terms of global sales, has three percent of the US market. With the purchase of Jeep, that share would immediately double, putting it just behind Nissan. Like every major automaker, Hyundai has seen its US sales slide this year, but they’re in a position to expand once the economy starts to rebound thanks to a new factory in Alabama.

Alas, Cerberus may have to wait a bit longer for its knight in shining armor to arrive as Hyundai, like Nissan/Renault and General Motors before it, says they aren’t interested in America’s #3 automaker. Even buying Jeep apart from the rest of Chrysler LLC isn’t enough to stoke Hyundai’s interest as the automaker says that they’re dedicating company resources to building new plants instead of acquiring competing assets.

(Source: Reuters)