Chrysler-Fiat Partnership Has Priority Over Chrysler-Nissan Deal

NEW YORK – Chrysler LLC’s pickups-for-cars swap with Nissan Motor Co. Ltd. is on the back burner as the U.S. auto maker tries to save itself from bankruptcy with a marriage to Fiat Auto Group.

No deal-breakers seen in Fiat talks, Chrysler Vice Chairman Jim Press says.

“We still are in discussion with Nissan,” Chrysler Vice Chairman Jim Press tells Ward’s after introducing the ’11 Jeep Grand Cherokee at the auto show here.

The Obama Admin.’s 30-day deadline for Chrysler to establish a partnership compels the auto maker to talk with Fiat instead of Nissan.

Citing deals such as Chrysler’s pact to build minivans for Volkswagen AG and its engine-production collaboration with Mitsubishi Motors Corp. and Hyundai Motor Co. Ltd., Press says partnerships are not new to the auto maker. “But right now, our sole focus is on Fiat,” Press says.

“We’ve got a relatively short period of time to conclude our discussions. That’s really where we’re putting all of our energy.”

Meanwhile, Press says Chrysler has made no determination over what affect a Fiat partnership might have on its plans with Nissan.

Obama’s auto industry task force has not endorsed the deal with Fiat, which would give Chrysler access to the Italian auto maker’s small cars.

But unlike the Nissan agreement, where Chrysler would supply the Japanese auto maker with a next-generation Titan pickup based on the new-for-’09 Dodge Ram, Fiat gets a 35% stake in Chrysler in exchange for small-vehicle platforms and small-displacement engine technology.

However, the task force does say the Fiat deal provides Chrysler with its best chance for survival.

Chrysler has received $4 billion in emergency aid from the U.S. Treasury Dept. and seeks up to $6 billion more to help it survive the crushing economic downturn spawned by the credit crisis. But the task force rejected its viability plan last week and told the auto maker it has 30 days to strike a deal with a partner or face bankruptcy.

Press would offer no further details on the status of the Fiat talks, saying only that the deadline should provide the auto maker with “ample time” and sees nothing at this time he would consider a deal-breaker.

Chrysler reached a framework agreement with Fiat last month, a move forward from the non-binding alliance term sheet they announced in January.

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