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Published: Monday, 2/23/2009

Beijing Auto mum on report it might bid for Chrysler

ASSOCIATED PRESS

SHANGHAI Officials at Chrysler LLC and Chinese car maker Beijing Automotive Industry Holding Corp. refused comment Monday on a report that the Chinese automaker might bid for assets of Chrysler LLC.

The state-run newspaper China Business News, citing an unnamed Beijing Auto executive, said Beijing Automotive wanted to acquire Chrysler assets using a similar approach to that taken by Nanjing Automobile (Group) Corp. s when it bought defunct automaker MG Rover Group.

The aim, China Business News said, was to acquire production facilities and technology to build up Beijing Auto s own brand vehicles. The Beijing city government might also provide support for such a deal, it said.

Staff at Beijing Auto s headquarters in Beijing, however, refused comment Monday.

Oh, I know what you are calling for, but it is not convenient to answer that question, said Jiang Wei, a staffer in the company s publicity department.

David Elshoff, spokesman for the Auburn Hills, Mich.-based Chrysler, also refused comment in an e-mail message.

Chrysler does not comment on rumors or speculation, nor does it confirm or disclose the nature of its private discussions, Elshoff wrote Monday.

But his message pointed out that Chrysler has identified more than $1 billion worth of non-earning assets it wants to sell, and it has completed selling $700 million worth. The company s viability plan submitted to justify its $4 billion in U.S. government loans says that Chrysler plans to sell the remaining $300 million in assets, Elshoff wrote.

Chrysler s majority owner is private-equity firm Cerberus Capital Management LP. The company lost $8 billion last year and is seeking billions more in government help as well as the $4 billion it has already received.

Like other Chinese automakers, Beijing Auto is keen to build up a globally competitive brand name. Its chairman, Xu Heyi, has expressed interest in fortifying the company through acquisitions and mergers.

In 1984, Beijing Auto was the local partner in China s first automaking joint venture, with American Motor Corp., Beijing Jeep Corp.

After two year s operation, the venture was bailed out by the Chinese government because almost all its sales were in Chinese currency, which was not convertible at the time, and it lacked the foreign exchange to import needed parts.

Chrysler became Beijing Auto s partner when it bought out AMC in 1987. Later, DaimlerChrysler AG launched a factory making Mercedes-Benz and Chrysler sedans. But Chrysler withdrew from the venture after it was acquired by Cerberus in 2007, leaving Daimler as the foreign partner.

Beijing Auto is also a partner with Korean automaker Hyundai Motor Co.



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