Nissan Motor Co. has suspended preparatory work for a business tieup with Chrysler LLC centering on supplies of compact cars despite their earlier agreement, sources close to the deal have said.
Nissan, which expects to see the first red ink since fiscal 1999 in the year to March, plans to review the business alliance agreement, with scrapping the whole deal as an option, to avoid further deterioration of its business, the sources said Thursday.
The cash-strapped U.S. carmaker, which received $4 billion in emergency loans from the U.S. government, is required to submit a restructuring plan by next Tuesday. If the restructuring plan fails to win government approval, Chrysler will be pressed to pay back the money and will not be entitled to receive additional loans.