For sale: A smaller Chrysler

recxjake · 02-14-2007, 02:25 PM

For sale: A smaller Chrysler

DaimlerChrysler to cut 13,000 jobs, close plants, eyes possible sale of troubled North American automaker.
By Chris Isidore, CNNMoney.com senior writer
February 14 2007: 2:36 PM EST

NEW YORK (CNNMoney.com) -- Chrysler Group will be cutting about 13,000 workers over the next three years and the company's German parent, DaimlerChrysler, may be cutting Chrysler itself as it weighs a sale or spin-off the unit - a move that could cast the nine-year old merger that formed the global automaker as a failure.

A German publication, Manager Magazin, reported that DaimlerChrysler Chairman Dieter Zetsche had met with General Motors Chairman Rick Wagoner about a possible sale of Chrysler to the No. 1 U.S. automaker, which has itself been struggling, cutting jobs and closing plants.

Zetsche and other company executives would not comment specifically on that report, other than to say the company was looking at various options for its troubled American unit.

"Please understand we can not provide you with any more details at this point in time," Zetsche said at a news conference at Chrysler's Auburn Hills, Mich., headquarters.

But he seemed far more open to the idea of a sale of Chrysler than he had been in the past. When questioned whether the company's statement meant it is looking a sale of the unit, he responded "this means all options are on the table."

Shares of DaimlerChrysler (Charts) jumped nearly 8 percent in afternoon trading in New York, after closing up 4.6 percent in Frankfurt on the possible sale of Chrysler, the jobs cuts and generally positive 2006 results for the parent company despite mounting losses at Chrysler. (More on jobs cuts) (More on earnings)

The announcements seemed to confirm that the 1998 purchase by DaimlerChrysler has provided little lift to the Chrysler Group brands - Chrysler, Dodge and Jeep. Chrysler Group has seen its sales tumble nearly 19 percent since the merger was completed in 1999, to only 12.9 percent of U.S. sales - putting Chrysler in fourth place in the U.S. market last year. The North American automaker, prior to the latest announcements, had eliminated a third of its jobs, closed 16 plants and facilities and dropped one of its brands - Plymouth, since the merger.

But the merger and all the previous cost-cutting moves could not reverse the long slide in sales that dropped DaimlerChrysler from its traditional No. 3 spot in the U.S. market last year to No. 4 behind Toyota Motor (Charts).

General Motors, which is struggling with its own losses, plant closings and turnaround plans, had no comment on the report out of Germany. Dave Cole, chairman of the Center for Automotive Research, said he would be shocked to see GM and Chrysler get together, although he said they could expand some areas of cooperation, such as an alliance on hybrid vehicles.

"I think the chance of any chance of a GM tie would be absolutely minimal," Cole sale. "If you were GM, would you really want another company that is going through its own turnaround?"

And Cole said that the financially successful global automakers such as Toyota or Honda (Charts) are not likely to buy Chrysler, given the success they're already seeing in North America. But he wouldn't rule out other buyers.

"The challenge is who would be a buyer," said Cole of a possible sale of Chrysler. "Maybe a Chinese company that really wants entrance into U.S. market or Renault-Nissan (Charts) would see it fit with its strategy. But it's tough."

Carlos Ghosn, CEO of both Renault and Nissan, has expressed a desire to have a North American automaker join the alliance between his two companies. His talks with GM about doing so failed last summer, though.

Kevin Tynan, auto analyst at Argus Research, said he believes Chrysler will end up being sold due to pressure from DaimlerChrysler's shareholders, but he thinks a sale to a private equity group is more likely than combination with another automaker. He said the unit could go for as little as $14 billion to $20 billion.

"There's value to those brands," he said. "I think relative to Ford (Charts), there's less dead weight. Nine years later, it's probably the right thing to do. I think there's a feeling in Germany that it's time to cut bait."

**Dave Lane** · 02-14-2007, 02:30 PM

Guess unless GMs health care issues are handled they are next...

Dave

StcChief · 02-14-2007, 02:36 PM

Crysler = bait.

InChiefsHeaven · 02-14-2007, 02:38 PM

Wow. I had no idea that Chrysler was in such trouble. I mean, it seem to me that of the American auto makers, they are turning out good vehicles...nothing like the 80's...weird...

htismaqe · 02-14-2007, 02:39 PM

Sorry jake, but misery doesn't love company.

It doesn't matter how many of these you post, it's not gonna improve GM's outlook any.

**HemiEd** · 02-14-2007, 02:44 PM

Wow, 14 to 20 billion would buy it? Chrysler had 12 billion in cash/reserves when Daimler took over. I am pretty sure that was in Germany before the ink dried on the "merger."

**morphius** · 02-14-2007, 02:46 PM

Quote:

Originally Posted by InChiefsHell

Wow. I had no idea that Chrysler was in such trouble. I mean, it seem to me that of the American auto makers, they are turning out good vehicles...nothing like the 80's...weird...

I think that they have been putting out some of the more innovating looking vehicles. I mean heck, all the trucks now look better because of the Ram's styling. Of course pimping the Hemi, and then gas prices jumping to $3 didn't help them at all.

InChiefsHeaven · 02-14-2007, 02:53 PM

Quote:

Originally Posted by morphius

I think that they have been putting out some of the more innovating looking vehicles. I mean heck, all the trucks now look better because of the Ram's styling. Of course pimping the Hemi, and then gas prices jumping to $3 didn't help them at all.

I guess that's gotta be it, but it just SEEMED like Chrysler was doing well. Dropping to number 4 is a shocker to me. I mean, they were always behind Ford and GM, but being edged out by Toyota is weird.

...maybe it's my location, but it seems that Toyota is an afterthought here in the Midwest. I guess from my vantage point, Chrysler is doing well. Must be the Coasts or something.

htismaqe · 02-14-2007, 02:56 PM

Quote:

Originally Posted by InChiefsHell

I guess that's gotta be it, but it just SEEMED like Chrysler was doing well. Dropping to number 4 is a shocker to me. I mean, they were always behind Ford and GM, but being edged out by Toyota is weird.

...maybe it's my location, but it seems that Toyota is an afterthought here in the Midwest. I guess from my vantage point, Chrysler is doing well. Must be the Coasts or something.

The Toyota dealership here in Des Moines is the largest car dealership, regardless of brand, in it's region, which I believe includes Nebraska and Minnesota.

recxjake · 02-14-2007, 03:03 PM

It's to bad... I'd like GM to pick them up....
Combine Jeep and Hummer...
Create a Corvette division... Corvette, Viper, Camaro and Challenger... wow... American Muscle at its best
GM stopped making minivans... who makes the best minivans... Chrysler
Use the Dealer network to fill in weak GM areas
Take the good products and keep them going.
Take the extra production into GM plants to keep them at full productivity and close all other plants.
It will keep GM as the world's biggerst automaker

**HemiEd** · 02-14-2007, 03:04 PM

Quote:

Originally Posted by InChiefsHell

I guess that's gotta be it, but it just SEEMED like Chrysler was doing well. Dropping to number 4 is a shocker to me. I mean, they were always behind Ford and GM, but being edged out by Toyota is weird.

...maybe it's my location, but it seems that Toyota is an afterthought here in the Midwest. I guess from my vantage point, Chrysler is doing well. Must be the Coasts or something.

Go to California and you won't see many American Cars period. You gotta have a Toyota, Honda or Nissan! If you are really a success you will have a Lexus, Infiniti or Beemer.

recxjake · 02-14-2007, 03:05 PM

Quote:

Originally Posted by htismaqe

Sorry jake, but misery doesn't love company.

It doesn't matter how many of these you post, it's not gonna improve GM's outlook any.

GM is doing just fine.... They are back in black

**morphius** · 02-14-2007, 03:06 PM

Quote:

Originally Posted by InChiefsHell

I guess that's gotta be it, but it just SEEMED like Chrysler was doing well. Dropping to number 4 is a shocker to me. I mean, they were always behind Ford and GM, but being edged out by Toyota is weird.

...maybe it's my location, but it seems that Toyota is an afterthought here in the Midwest. I guess from my vantage point, Chrysler is doing well. Must be the Coasts or something.

I'm guessing it was more your family. My family had a couple Dodge's back in the 70's, but since then everything has been Toyota or Mazda, until my Dad picked up the Hemi Ram, mostly because he always liked the Hemi's.

htismaqe · 02-14-2007, 03:12 PM

Quote:

Originally Posted by recxjake

GM is doing just fine.... They are back in black

Chrysler will be fine too. After all they learn the "slash and burn" technique from GM.

recxjake · 02-14-2007, 03:13 PM

Quote:

Originally Posted by htismaqe

Chrysler will be fine too. After all they learn the "slash and burn" technique from GM.

and Ford.

02-14-2007, 02:25 PM
recxjake MVP Join Date: Oct 2005 Casino cash: $10004900	For sale: A smaller Chrysler For sale: A smaller Chrysler DaimlerChrysler to cut 13,000 jobs, close plants, eyes possible sale of troubled North American automaker. By Chris Isidore, CNNMoney.com senior writer February 14 2007: 2:36 PM EST NEW YORK (CNNMoney.com) -- Chrysler Group will be cutting about 13,000 workers over the next three years and the company's German parent, DaimlerChrysler, may be cutting Chrysler itself as it weighs a sale or spin-off the unit - a move that could cast the nine-year old merger that formed the global automaker as a failure. A German publication, Manager Magazin, reported that DaimlerChrysler Chairman Dieter Zetsche had met with General Motors Chairman Rick Wagoner about a possible sale of Chrysler to the No. 1 U.S. automaker, which has itself been struggling, cutting jobs and closing plants. Zetsche and other company executives would not comment specifically on that report, other than to say the company was looking at various options for its troubled American unit. "Please understand we can not provide you with any more details at this point in time," Zetsche said at a news conference at Chrysler's Auburn Hills, Mich., headquarters. But he seemed far more open to the idea of a sale of Chrysler than he had been in the past. When questioned whether the company's statement meant it is looking a sale of the unit, he responded "this means all options are on the table." Shares of DaimlerChrysler (Charts) jumped nearly 8 percent in afternoon trading in New York, after closing up 4.6 percent in Frankfurt on the possible sale of Chrysler, the jobs cuts and generally positive 2006 results for the parent company despite mounting losses at Chrysler. (More on jobs cuts) (More on earnings) The announcements seemed to confirm that the 1998 purchase by DaimlerChrysler has provided little lift to the Chrysler Group brands - Chrysler, Dodge and Jeep. Chrysler Group has seen its sales tumble nearly 19 percent since the merger was completed in 1999, to only 12.9 percent of U.S. sales - putting Chrysler in fourth place in the U.S. market last year. The North American automaker, prior to the latest announcements, had eliminated a third of its jobs, closed 16 plants and facilities and dropped one of its brands - Plymouth, since the merger. But the merger and all the previous cost-cutting moves could not reverse the long slide in sales that dropped DaimlerChrysler from its traditional No. 3 spot in the U.S. market last year to No. 4 behind Toyota Motor (Charts). General Motors, which is struggling with its own losses, plant closings and turnaround plans, had no comment on the report out of Germany. Dave Cole, chairman of the Center for Automotive Research, said he would be shocked to see GM and Chrysler get together, although he said they could expand some areas of cooperation, such as an alliance on hybrid vehicles. "I think the chance of any chance of a GM tie would be absolutely minimal," Cole sale. "If you were GM, would you really want another company that is going through its own turnaround?" And Cole said that the financially successful global automakers such as Toyota or Honda (Charts) are not likely to buy Chrysler, given the success they're already seeing in North America. But he wouldn't rule out other buyers. "The challenge is who would be a buyer," said Cole of a possible sale of Chrysler. "Maybe a Chinese company that really wants entrance into U.S. market or Renault-Nissan (Charts) would see it fit with its strategy. But it's tough." Carlos Ghosn, CEO of both Renault and Nissan, has expressed a desire to have a North American automaker join the alliance between his two companies. His talks with GM about doing so failed last summer, though. Kevin Tynan, auto analyst at Argus Research, said he believes Chrysler will end up being sold due to pressure from DaimlerChrysler's shareholders, but he thinks a sale to a private equity group is more likely than combination with another automaker. He said the unit could go for as little as $14 billion to $20 billion. "There's value to those brands," he said. "I think relative to Ford (Charts), there's less dead weight. Nine years later, it's probably the right thing to do. I think there's a feeling in Germany that it's time to cut bait."
Posts: 5,133

02-14-2007, 02:30 PM	#2
Dave Lane Space Cadet and Aczabel Join Date: Aug 2000 Location: Kanab, UT, USA Casino cash: $9333275 VARSITY	Guess unless GMs health care issues are handled they are next... Dave __________________ Thanks, Trump for the civics lesson. We are learning so much about RICO, espionage, sedition, impeachment, the 25th Amendment, order of succession, nepotism, separation of powers, 1st Amendment, obstruction of justice, the emoluments clause, conflicts of interest, collusion, sanctions, oligarchs, money laundering and so much more.
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02-14-2007, 02:36 PM	#3
StcChief Playing for #1 Draft Pick Join Date: Oct 2003 Location: Just West of Lambs land Casino cash: $10004900	Crysler = bait. __________________ sig test for this screwy schema
Posts: 25,901

02-14-2007, 02:38 PM	#4
InChiefsHeaven Rockin' yer FACE OFF! Join Date: Feb 2003 Location: Omaha, Nebraska Casino cash: $755437	Wow. I had no idea that Chrysler was in such trouble. I mean, it seem to me that of the American auto makers, they are turning out good vehicles...nothing like the 80's...weird... __________________ We have a million reasons for failure, but not one excuse... Die Donks, DIE!! Holy Crap fellas!!! We did it!!! THREE TIMES!!!
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02-14-2007, 02:39 PM	#5
htismaqe 'Tis my eye! Join Date: Aug 2000 Location: Chiefsplanet Casino cash: $8179900	Sorry jake, but misery doesn't love company. It doesn't matter how many of these you post, it's not gonna improve GM's outlook any.
Posts: 104,292

02-14-2007, 02:44 PM	#6
HemiEd Supporter Join Date: Dec 2004 Location: Ozarks Casino cash: $-319436	Wow, 14 to 20 billion would buy it? Chrysler had 12 billion in cash/reserves when Daimler took over. I am pretty sure that was in Germany before the ink dried on the "merger."
Posts: 34,815

02-14-2007, 03:03 PM	#10
recxjake MVP Join Date: Oct 2005 Casino cash: $10004900	It's to bad... I'd like GM to pick them up.... Combine Jeep and Hummer... Create a Corvette division... Corvette, Viper, Camaro and Challenger... wow... American Muscle at its best GM stopped making minivans... who makes the best minivans... Chrysler Use the Dealer network to fill in weak GM areas Take the good products and keep them going. Take the extra production into GM plants to keep them at full productivity and close all other plants. It will keep GM as the world's biggerst automaker
Posts: 5,133