Damiler: considering sale of Chrysler to GM?

[ragingfish]

First GM, then Ford. Now it looks like Chrysler's future is questionable...Quote »Source: Special Automotive News Email AlertFRANKFURT (Reuters) -- DaimlerChrysler dropped its long-standing commitment to the Chrysler group today and said it was prepared to review all its options, including finding new partners for its loss-making U.S. arm.The announcement by the world's fifth-biggest carmaker just ahead of a news conference in Detroit to outline its turnaround strategy for the Chrysler group sent the group's stock up more than 5 percent to its highest level since June 2002."The market clearly wants something radical. That might be hard to do given the size of the pension liabilities and the linkages between Daimler and Chrysler," one London trader said. "They'll close some plants and take costs out."Still, the statement was a departure from the group's clear statement as recently as October that the Chrysler group was not for sale."Today the supervisory board will reach a decision on the board of management's decision to restructure the Chrysler Group. The board of management intends to consider other, more far-reaching strategic options with partners in order to support and facilitate the program," the company said. "No option is being excluded in the interest of arriving at the best possible solution for the Chrysler Group and DaimlerChrysler as a whole."And from another article:Quote, originally posted by Reuters » FRANKFURT, Feb 14 (Reuters) - DaimlerChrysler declined comment on a German magazine report on Wednesday that it was in talks to sell its loss-making Chrysler division to General Motors."I cannot and will not go into any further details," Chief Executive Dieter Zetsche told reporters in Detroit when asked about GM. The news conference was carried on the Internet.Germany's Manager Magazin cited company sources as saying the talks were in full swing but still at an early stage. There is a lot of discussion over at GMI regarding this. IF this is legit, and GM is considering the purchase of any or all of CG's assets, there is speculation the most beneficial purchase would be that of Jeep. Jeep and HUMMER combined could give GM a complete global lock on the off-road vehicle industry.Other speculation says the GM's absorbtion of Chrysler could once again give GM an upper hand in the minivan segment -- the one segment they recently abandoned because they simply couldn't compete.And of course, GM's award winning trucks could be paired with the Dodge lineup's few shining stars to also give them an even bigger leg up in the truck market.This is most definitely one of the stories we all should watch closely!

[ragingfish]

More:Quote »DaimlerChrysler CEO Dieter Zetsche is considering the radical step of selling the company's Chrysler division, reports said Wednesday. Zetsche has asked a US investment bank to examine possible options for the German-American company amid an expected billion-dollar-loss suffered by Chrysler last year."Anything is possible . and it is considerably more likely that something drastic will happen than nothing at all," said an unnamed company source quoted in the German business daily Handelsblatt.

[ragingfish]

and MORE!Quote, originally posted by Forbes »DETROIT -DaimlerChrysler Chief Executive Dieter Zetsche, under enormous pressure in Germany to spin off the money-losing Chrysler Group, says all options for the U.S. auto making arm are now on the table.The surprise statement overshadowed details of Chrysler's three-year, $4.5 billion recovery plan announced Wednesday that includes 13,000 job cuts.Attention immediately shifted to who, if anyone, might be interested in Chrysler. A German magazine reported that DaimlerChrysler was in talks to sell its Chrysler unit to General Motors, but officials declined to comment. "I cannot and will not go into any further details," Zetsche told reporters in Detroit.Carlos Ghosn, chief executive of France's Renault and Japan's Nissan, has made known his desire to add a North American partner to that global alliance. But after talks with GM broke down earlier this year, he played down that ambition. When asked about future alliances during a Renault press conference on Feb. 8, Ghosn said both companies needed to focus on their own challenges. "Is that in general terms a good idea? Yes, I believe it is a good idea, because we are thinking in terms of synergies that we have measured," he said. "However, at this stage we are not moving on."On Wednesday, Ghosn reiterated that position. "We remain open to extending the alliance, but we have no plans to pursue that at this time. Nissan is focused on its own challenges and performance."But the pressure on Zetsche to shed Chrysler is intense. Over the weekend, a DaimlerChrysler shareholder told a German newspaper, "This needs to be an option that must be examined again and again." DWS fund manager Henning Gebhardt compared a potential DaimlerChrysler breakup to BMW's sale of Rover: "It would be irresponsible for [Daimler] management to exclude this option." DWS, Germany's largest fund company, owns less than 1% of DaimlerChrysler shares.By putting Chrysler in play, Zetsche bought himself some time to try to fix the struggling Chrysler. And his surprise announcement managed to deflect pressure onto the United Auto Workers union, which has been none too cooperative with Chrysler in recent months. The union has refused to give Chrysler the same health care concessions it gave General Motors and Ford Motor, for instance, because of the deep pockets of its German parent company. With bargaining on a new national contract set to begin later this year, Zetsche's message to the UAW was clear: Accept new terms, or Chrysler could be sold.Zetsche doesn't seem all that eager to shed Chrysler, a company he successfully turned around earlier this decade. In fact, he has said so on several recent occasions. Other senior managers in Germany support his position, say company sources.The problem, these sources say, is that nine years after the marriage between Daimler-Benz and Chrysler, mid-level managers at Mercedes are still resisting any collaboration that could sully the luxury brand's image. That has made it difficult to achieve the level of synergies promised in 1998.Chrysler Group President Thomas LaSorda said the recovery plan outlined Wednesday would solidify Chrysler's position in the North American market while laying the foundation for a new business model that would stress global growth and a shift to more fuel-efficient models. The plan calls for a return to profitability by 2008 and a 2.5% return on sales by 2009. Chrysler lost $1.5 billion in 2006, while DaimlerChrysler overall earned $7.3 billion.In all, Chrysler said it would eliminate 13,000 jobs, or 16% of its workforce, including 11,000 in the U.S. and 2,000 in Canada. In the U.S., 2,000 white-collar jobs would be cut, along with 9,000 UAW jobs. It will shut an assembly plant in Newark, Del., that makes large SUVs, and a parts distribution center in Ohio. Eliminating shifts at two other truck plants in Michigan and Missouri will help reduce production capacity by 400,000 units, the company said.Meanwhile, Chrysler said it would launch 20 all-new vehicles, and 13 refreshed products, between now and 2009. It also will invest $3 billion in new engines, transmissions and axles in a bid to develop more fuel-efficient cars and trucks. At the same time, it intends to eliminate 70,000 low-margin rental car sales, which should help profits.Rising costs for raw materials like steel and plastic are one reason Chrysler and other automakers had a tough year in 2006. Nevertheless, Chrysler said its aim is to cut material costs by $1.5 billion by 2009.Longer term, Chrysler said it wants to expand outside of North America, where 90% of its sales currently are based, and make more use of global partnerships. It recently announced an agreement in principle with China's Chery Automobile Company, for instance, to develop a small car for sale in North America and Western Europe.Indeed, an alliance or partnership, rather than an outright sale, might be what Zetsche has in mind for Chrysler. The company, he said, is "looking into further strategic options with partners" that would accelerate Chrysler's recovery.

[northvibe]

how could GM even afford Chrysler and why would they sell it. The dodge side is doing well but I guess they dont really need Chrysler but it is the higher end dodge.

[ragingfish]

No arm of CG is doing that well...

[ColonelPanic]

Quote, originally posted by ragingfish »Jeep and HUMMER combined could give GM a complete global lock on the off-road vehicle industry.And that way, finally Jeep and Hummer can happily share that stupid grille! Hummers are off road vehicles? Those obnoxious examples of man's own arrogance, insecurity, and disrespect for the environment? HAHAHAHAHAHAHAHAHAHAHAHA! They can't take those offroad, geez! It would get dirty! Suzie Soccermom and her husband (who by the way obviously must be compensating for something) would never let that happen, worst those will EVER see in their lifetime is the dust from where they were working on the mall parking lot!Ahem, anyway... This IS interesting news... Can GM handle this? They couldn't handle the number of divisions they had a few years back when Olds was around so they axed those guys - how can they add three more now? Although I wouldn't object at all to them buying 'em... Chrysler has quite a nice lineup as of lately. I wouldn't have said that 10 years ago. It really looks like their cars have soul... But if GM buys them and rids "Chrysler" products of the current engineering and instead tries to give us even more rebadges, no thanks.

[Whelan]

Jeep is the only brand at Chrysler making money, lol.

[KNINE]

GM is just starting to dig itself out of the deep hole it's been in for years. I can't see them taking on Chrysler.Here's a link to what Autoextremist had to say about the state of Chrysler. I've found them to be pretty accurate about the automotive industry. http://www.autoextremist.com/page6.shtml

[ToolGuy]

February 16, 2007-------------------------------From the newsroom of Automotive NewsSources: GM in talks about buying Chrysler groupGeneral Motors is in negotiations to buy the struggling Chrysler groupin its entirety, say sources in Germany and the United States.High-level talks are taking place between DaimlerChrysler AG and GMexecutives.Although the two companies have discussed cooperation on a large SUV,say sources at both companies, the potential deal would go beyondlimited product development alliances.Talk of an alliance was first reported last week in Germany'sManager-Magazin.GM spokesman Tony Cervone declined to comment on the speculation,saying, "We have always said that conversations (between GM and manyother parties) have happened all the time, and many times they don'tcome to fruition."A Chrysler spokesperson declined to comment. Other sources have reactedskeptically.Asked about the possible deal, Klaus Franz, GM's top union official inEurope, said acquiring Chrysler would be a "disaster" for the automaker.Franz is vice chairman of the supervisory board at GM Europe's Opeldivision, based in Germany."This is only a step to remain the number-one automaker. The problem isthat Chrysler is in the same situation as GM. They don't have the rightproduct portfolio," Franz told Automotive News Europe. "This would be comparable to GM's alliance with Fiat. And GM lost a lotof money with that decision. I hope GM learned its lesson."Roman Mathyssek, an analyst for Global Insight in London, also isskeptical of a purchase: "At the end of the day, if they were really todo that, that would not be a cheap option for DaimlerChrysler at themoment. It would be a lot more effective for the DaimlerChrysler groupto look at how they can continue their cooperation."Last week, uncertainty over Chrysler's future increased asDaimlerChrysler CEO Dieter Zetsche said the company was open to alloptions for the Chrysler group, including a sale."All options are on the table," Zetsche said.Chrysler unveiled a restructuring plan as it posted a $1.4 billion (1.1billion euro) loss for 2006. That plan calls for cutting 13,000 jobs inNorth America by 2009.According to media reports, DaimlerChrysler retained JPMorgan Chase &Co. to consider options for the Chrysler group.DaimlerChrysler revealed its latest restructuring plan for Chrysleralmost six years to the day after its first attempt at shoring upprofits. Zetsche ran Chrysler until taking the top spot in Stuttgartlast year.Although growing ranks of shareholders would like to see Chrysler go,selling it is easier said than done. In Cologne, Germany, Bank Sal.Oppenheim analyst Michael Raab estimates it would cost $34 billion toseparate the two businesses. Analysts say a real stumbling block is the roughly $23.6 billion inunfunded pensions and health care liabilities for retirees that anybuyer would want financed in full.

[ToolGuy]

IF this happens and I would want it to at this point, I see it as a great thing!Think of all the possibilities for the two, market share, UAW policies and procedures, the list is ends-less.Sure would beat a foreigner coming in a buying DCX!

[Mavrik]

I think its a great idea myself. Merge struggling industries so they can combine efforts and hopefully succeed.

[ToolGuy]

Here is a new one! 8:24 am, February 19, 2007SEOUL (Reuters) -- Hyundai Motor Co. is among potential bidders to buy Chrysler, the struggling U.S. arm of DaimlerChrysler AG, Britain's Sunday Times reported, citing unidentified sources.Hyundai is interested in securing access to Chrsyler's dealer network in the United States, the Sunday Times said.A Hyundai Motor spokesman in Seoul denied the report.Automotive News reported Friday that General Motors is in preliminary talks to buy Chrysler or strike a strategic alliance with the rival automaker.JPMorgan is advising on the future of Chrysler and will send information memorandums to a number of potential suitors, including General Motors and Hyundai, as early as this week.The Wall Street Journal reported on its Web site Sunday that it has received "several expressions of interest from around the world" for Chrysler.The newspaper cited two people close to the situation for the report, but did not name the potential suitors for the U.S. automaker.Last week, DaimlerChrysler said it would cut 13,000 jobs in North America and indicated it could sell or spin off the unit, which it bought nine years ago.

[kostby]

Good Heavens! ColonelPanic could end up owning a Kia-RICE-ler!

[Raivis]

ok heres my .02i think what needs to happen, and i hope someone from gm or someone that knows someone reads this, as much as i don't like to say this, D.C, GM, and FORD need to put differences aside, work together and get themselves back on top. don't get me wrong i like toyota. i think the big three need to work together and get things back. as for hyundai buying D.C i think its a bad idea! keep it American!!!i know ill hear about this one but i had to say something. does anyone agreei may not have worded things right but i think my point will get across

[SeattleJeremy]

GM can't/wont buy Chrysler corp. It's just not gonna happen.They might do this though "The New York Times has already confirmed from inside sources that the two companies are talking, but the topic of conversation is sharing the GMT900 full-size SUV platform."http://www.autoblog.com/2007/0...uyout/

[ZubenElGenubi]

I have a strong suspicion that if GM bought Chrysler, they would break it into its smallest components and sell it as scrap. The only reason GM has an interest in Chrysler is to eliminate a competitor.