Chrysler talking with foreign automakers

Chrysler president Tom LaSorda will invest $1.8 billion in new-vehicle programs to try to stem the company's US sales slide. (Jeff Kowalsky/Bloomberg News)

TRAVERSE CITY, Mich. - Chrysler LLC has talked with automakers in Russia and India about potential tie-ups and was approached by Fiat about a partnership, although no formal discussions are ongoing, a senior Chrysler executive said yesterday.

Chrysler, the number three US-based automaker, is also planning a car-based SUV that will hit showrooms in 2010, and has identified over $1 billion in nonearning assets it will sell to raise cash as it tries to turn around its operations.

Chrysler vice chairman and president Tom Lasorda said the automaker is moving ahead with plans to forge alliances, especially in emerging markets.

"When we look at alliances in different regions, we have had discussions with multiple companies in Russia," LaSorda said on the sidelines of an industry event. "In India we have had discussions with many companies."

LaSorda, who declined to name the companies, said the automaker may decide on a Russian partner by the end of 2009.

Chrysler was approached by Fiat SpA, the Italian automaker, for a potential partnership, he said.

"Have they approached us? Yes," he told reporters, referring to Fiat. "At this stage there is no formal discussion going on, but there was an inquiry."

Fiat chief executive Sergio Marchionne, credited with turning around the Alfa Romeo, Lancia, and Fiat brands, has said Fiat is looking for a partner for its return to the North American market.

Sources said last month Chrysler was in talks with Fiat about leasing manufacturing capacity and sharing retail distribution, which would allow Fiat to return to the US market for the first time in 25 years.

Chrysler is also in discussions with India's Tata Motors Ltd. about selling its Jeep Wrangler SUV in India and possibly other Asian markets, according to sources.

LaSorda said Chrysler's owner, Cerberus Capital Management LP, was committed to "holding on" to the automaker for the long term as it seeks tie-ups amid a steep decline in US auto sales.

Detroit automakers have been hit hard by a dramatic shift in buying to passenger cars and fuel-efficient car-based SUVs, forcing them to restructure.

Chrysler's US sales have declined 23 percent through the first seven months of the year.

Chrysler plans to invest about $1.8 billion over the next two years to retool and expand its Jefferson North assembly plant in Detroit that builds the Jeep Grand Cherokee, a truck-based SUV.

The new car-based SUV will retain the Grand Cherokee name, LaSorda said.