Chrysler Mulls Nissan/Renault Pact: Report

The automaker, however, still prefers a merger with General Motors, according to a published report.

Author:: TSC Staff
Publish date:: Oct 21, 2008 1:09 AM EDT

Chrysler

may join an existing manufacturing and development alliance between Japan's

Nissan

(NSANY)

and France's

Renault

, the

Wall Street Journal

reports.

However, a sale of the auto maker to

General Motors

(GM) - Get Report

is still the preferred path, the newspaper reports, citing people familiar with the matter.

Cerberus Capital

, Chrysler's majority owner, is discussing having Nissan, and possibly Renault, acquire a minority stake in Chrysler. It's not clear if Chrysler or Cerberus would be asked to purchase an interest in the Japanese and French auto makers in order to maintain a cross-shareholding relationship, the

Journal

reports.

For now, Cerberus prefers a deal in which GM takes control of Chrysler. But GM has been unable to secure financing for a deal amid continued credit-market worries and the immediate costs of such a merger. As a result, Cerberus is continuing to pursue the option of having Chrysler team up with Nissan, according to the

Journal

Meanwhile, the

Associated Press

reports Nissan plans to cut auto production at two plants in Japan because of sluggish sales in the U.S.