Cerberus Capital Management, which owns 80 percent of Chrysler, has no plans to divest its stake in Chrysler and aims to own an interest in any combined company that may result from a merger with the U.S. automaker, a source familiar with Cerberus' thinking said on Monday.



Cerberus had held talks about potentially combining Chrysler with General Motors Corp, but never discussed divesting its entire Chrysler stake or swapping Chrysler in exchange for an increased stake in auto-financing business GMAC, the source said.



'Cerberus is not dumping Chrysler or simply swapping it for an increased share in GMAC. That deal was not discussed and they have no interest in it,' said the source, who declined to be identified because the source was not authorized to speak with the media.



'In any business combination with GM or anyone else, Cerberus would look to come out on the other side owning a meaningful stake in the combined auto company,' the source said.



Cerberus has no plans to exit the auto industry, despite a 25 percent drop in Chrysler's sales this year, the source said.



'For the right deal, Cerberus would invest more money,' the source said. 'This is a long-term investment with a lot of upside.'



Cerberus bought an 80 percent stake in the automaker in August 2007 from Daimler AG, but the U.S. auto market has seen demand plunge since then because of a combination of high gasoline prices, tight credit and a weak housing market.



'Cerberus executives have maintained repeatedly that they believe in the industry. They expect to be there for the long term and want to do all they can to position Chrysler for the future,' the source said.