Chrysler seeks manufacturing ties with automakers

U.S. automaker Chrysler LLC is seeking manufacturing alliances with other automakers in the face of a steep downturn in U.S. auto sales.

Chrysler has "the flexibility" to perform contract manufacturing and will continue to pursue such opportunities to "generate cash as a smaller company," Frank Ewasyshyn, Chrysler's executive vice president in charge of manufacturing, said at an industry forum in Traverse City, Michigan.
"We have looked at partners for a lot of things and we are going to continue to do that for the best business model," Ewasyshyn said.

Sources said last month that Chrysler was in talks with Fiat SpA with the aim of leasing manufacturing capacity to the Italian automaker.

Chrysler has declined to comment on the talks with Fiat, which could open the way for the Italian automaker to re-enter the U.S. market.

Chrysler also has an agreement to build a truck for Japan's Nissan Motor Co Ltd, which will build a small car for Chrysler.

Ewasyshyn said although the automaker's current plan is to build the Nissan-designed truck at Chrysler's plant in Saltillo, Mexico, Chrysler has the capacity to build it at other plants as well
Chrysler also has the flexibility to add more car-based platforms to its facilities including the Sterling Heights, Michigan plant which builds the Dodge Avenger and the Chrysler Sebring sedans, Ewasyshyn told Reuters on the sidelines of the forum.

"The Sterling Heights plant is set up to be very flexible and can accommodate three to four platforms. In fact we can do a car-based platform at several locations," he said.

Chrysler, the No. 3 U.S.-based automaker, which is controlled by private equity firm Cerberus Capital Management LP [CBS.UL], is looking to raise cash as it faces scrutiny over its liquidity because of the sharp decline in truck sales.

Chrysler total vehicle sales are down 23 percent through the first seven months of the year.

Chrysler has been hit harder than rivals by a consumer defection from trucks and SUVs because light trucks represent 70 percent of its sales.

Moody's Ratings downgraded Chrysler last week. Citing competitive and financial pressures, While Fitch Ratings downgraded Chrysler last month, warning that the automaker could run below the "minimum required levels" of cash to finance operations by the second half of 2009 if industry wide sales remain flat or worsen.

Meanwhile, Automotive News quoted Ewasyshyn as saying that Chrysler is negotiations with the United Auto Workers to put factory workers on four 10-hour work days instead of five, eight-hour work days in a bid to cut costs.

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