Chrysler CEO LaSorda aims for small car partner by end of '06

Tom LaSorda

Reuters / DETROIT (Reuters) -- The Chrysler group aims to finalize by the end of this year a partner to build and launch a subcompact car, CEO Tom LaSorda said today.

LaSorda, speaking to the Automotive Press Association, also said the company has not ruled out China as an export hub for the new car.

"We know we can't do it alone," he said. "The capital expense alone would be very high."

Chrysler currently has no model in the subcompact car segment, which is popular outside United States.

The company had been in talks with automakers in Europe and Asia, LaSorda said.

"If we cannot find a partner with a profitable business case we will not go into that segment," he said.

Chrysler showed a small car concept called Hornet earlier this year at the Geneva auto show, which could indicate the design direction of the small car if Chrysler decides to enter the segment.

The company is also in the midst of assessing its overall cost structure as it faces a glut of unsold pickups and SUVs.

The Chrysler group on Tuesday, Sept. 19, said it would slash current-quarter production by 24 percent. The company is forecasting a loss expected to reach $1.5 billion in the third quarter.

LaSorda said today that Chrysler would try to reopen talks with the United Auto Workers union aimed at clinching an agreement to cut its $2.3 billion in annual spending on worker health care.

"Obviously we hope to keep the dialogue going," he said. "We will see what happens."