Auto Titans' Talks Break Down

DaimlerChrysler AG and Nissan Motor Co. announced Wednesday that they had broken off talks over DaimlerChrysler's possible acquisition of a stake in Nissan Motor Co. of Japan.

"We discussed our options of a potential partnership very openly and in a very friendly atmosphere, but finally decided not to pursue a participation," DaimlerChrysler co-Chairman Juergen Schrempp said in a statement issued from Tokyo after he met with Nissan President Yoshikazu Hanawa.

Talks broke down regarding DaimlerChrysler buying an equity stake in all of Nissan as well as an outright purchase of its commercial truck subsidiary, DaimlerChrysler spokesman Steve Rossi said at the Geneva International Motor Show.

"A possible relationship would not be as quick to realize as we would have hoped," Rossi said. "We'd like to maintain and pursue our ongoing integration of DaimlerChrysler."

Talks will continue between Nissan and Renault SA, Renault chief executive Louis Schweitzer said at the Geneva show. He said there was no deal yet and referred to Renault's statement of March 1, in which the French automaker said Nissan would offer a good strategic fit.

DaimlerChrysler, which was just formed in November with the merger of Daimler-Benz AG of Germany and Chrysler Corp. of the United States, had been in intense discussions with Nissan for the past three months. Schrempp made no secret of his desire to acquire a controlling interest in the big Japanese automaker to complete its global footprint.

But Nissan is staggering under an estimated $22 billion to $37 billion in debt, and DaimlerChrysler apparently was unwilling to saddle itself with a portion of that red ink while it remains in the midst of combining its vast worldwide operations.

"We have emphasized that the integration of Daimler and Chrysler has utmost priority in our current business activities," Schrempp said.

The DaimlerChrysler statement said both parties agreed to continue pursuing exiting joint ventures between DaimlerChrysler and Nissan Diesel in commercial trucks and light trucks.

Written by Brian S. Akre