Chrysler may divest Viper

Automakers turn focus away from specialty vehicles

Chrysler's 10-cylinder, 600-horsepower Viper accounted for just 682 of the company's 965,935 US deliveries through July.

SOUTHFIELD, Mich. - Chrysler LLC, now studying a sale of its Viper sports-car business, is following General Motors Corp. and Ford Motor Co. in looking to shed specialty vehicles and focus on main brands.

Ford during the past two years sold off its UK-based luxury-car divisions. GM is considering a sale of its Hummer line of sport-utility vehicles based on military trucks. Chrysler said yesterday that it hired Lazard Ltd. to help in a review of options for the 600-horsepower, 10-cylinder Viper.

"When times are tough, you retreat to the core businesses," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.

GM, Ford, and Chrysler, the three US-based automakers, are scaling back as they lose money, sales, and market share in their home country. GM hasn't posted an annual profit since 2004, while Ford hasn't done so since 2005. Daimler AG sold Chrysler to Cerberus Capital Management LP a year ago because of losses.

With losses and shrinking US sales, the automakers may balk at putting more money into relatively low-volume vehicles such as Chrysler's Viper, which accounted for just 682 of the company's 965,935 US deliveries through July, or GM's Hummer, which generated 18,035 of GM's 1.82 million total.

"You don't have enough money to fund everything," said Stephanie Brinley, a Southfield, Mich.-based analyst for AutoPacific Inc. "You have to make those tough choices when you've been losing money as long as they have."

Ford chief executive Alan Mulally sold Aston Martin for $931 million in 2007 to a group led by UK auto-racing champion David Richards, and Jaguar and Land Rover for $2.4 billion in June to India's Tata Motors Ltd. Ford also contributed about $600 million to Jaguar and Land Rover's pension funds.

Mulally has said his top priority is getting his company's regional units to work more closely together, a strategy he calls "One Ford." The Dearborn, Mich.-based automaker retains Sweden-based Volvo.

GM chief executive Rick Wagoner said on June 3 that his company was reviewing Hummer for a possible revamping or sale after US purchases of the SUVs fell 36 percent through May from a year earlier. The Detroit-based automaker hired Citigroup Inc. to assist its review.

"GM did receive expressions of interest from various entities," Martin Walsh, Hummer's general manager, said in a video sent to US retailers last week. "But we have never solicited offers and we have not negotiated with any parties."

Neither GM nor Ford has forecast when losses will end. Ford posted an $8.7 billion deficit in the second quarter, the worst quarterly deficit in its 105 years. GM's $15.5 billion loss during the period was third worst in its 100-year history.

Chrysler is closely held and doesn't release detailed financial information on a regular basis. The automaker said on Aug. 1 that it earned $1.1 billion in this year's first half, excluding interest, taxes, depreciation, amortization, and restructuring costs.

CEO Bob Nardelli said yesterday that Chrysler has been "approached by third parties who are interested in exploring future possibilities for Viper," without identifying them. The company said it doesn't have a timetable for deciding.