Chrysler talks with Renault-Nissan off

DETROIT, Nov. 2 (UPI) -- Cerberus Capital Management LP, owner of Chrysler, has halted talks on a possible partial acquisition by Renault-Nissan, The Detroit News reports.

Sources told the newspaper Cerberus prefers General Motors Corp. as a partner. Cerberus executives believe a deal between GM and Chrysler would be financially better and do more for the U.S. auto industry, the report said.

Renault-Nissan wanted to acquire a 20 percent stake in Chrysler, whereas GM is reportedly interested in a merger. Chrysler is losing money.

GM, which is burning through its cash reserves, is reported to be seeking low-interest government loans for the Chrysler merger.

Even the Japanese automakers are having trouble. Nissan cut its profit forecast for the year to 40.5 percent Friday, predicting a drastic decline in income.

"The global financial and economic crisis has had a profound effect on every area of our industry, with the grip on credit and declining consumer confidence being the most damaging factors," said Carlos Ghosn, chief executive officer of Nissan and Renault.