For sale: A smaller Chrysler - Page 5

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."

**chefsos** · 02-14-2007, 06:01 PM

Quote:

Originally Posted by HemiEd

I don't know if it is still current, but that used to mean another 10,000 support jobs from vendors.

I wouldn't doubt that a bit. Local news stories describe how Newark, the town where the plant's located, more or less grew up around it.

Quote:

Originally Posted by HemiEd

Is Sikorsky still there in Dover?

The helicopter manufacturer? To be honest, I don't even know that they were ever here, but I'm not too bright.

boogblaster · 02-14-2007, 06:03 PM

Biggest problem is sales are down.. prices are to high for normal joe to buy new every few years.. If you don't have a market, so can't sell em ...so no need to build em....

stevieray · 02-14-2007, 06:10 PM

I wonder why Police Departments drive American cars.

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, 06:03 PM	#62
boogblaster MVP Join Date: Sep 2005 Location: Verdigris Valley Campsite Casino cash: $10004900	Biggest problem is sales are down.. prices are to high for normal joe to buy new every few years.. If you don't have a market, so can't sell em ...so no need to build em.... __________________ WR or S please
Posts: 10,305

02-14-2007, 06:10 PM	#63
stevieray Most things I worry about… Join Date: Aug 2000 Location: Under Pressure Casino cash: $-1134727	I wonder why Police Departments drive American cars.
Posts: 74,008