Late yesterday, insiders privy to the ongoing talks within DaimlerChrysler to sell off its less profitable American half have leaked that the number of groups vying for control of the ailing automaker have been narrowed down to three.
Cerberus Capital Management, a New York-based private equity firm, is one of the top contenders and has recently established itself as a force to be reckoned with within the U.S. auto industry. Between the recent purchase of a 51-percent stake in GMAC, acquiring the assets of Tower Automotive and making a serious play for Delphi Corp., the addition of Chrysler to its ever-expanding portfolio would give the firm even more clout than it has received thus far.
The Blackstone Group, headed by CEO Stephen Schwarzman, recently named the "King of Wall Street" by Fortune magazine, is another serious player. With over 100 companies in its stable and voicing support of Tom LaSorda, Chrysler's CEO, the firm intends to merely supervise the board, rather than oust sitting members, if a buyout was to take place.
Magna seems to be the most unlikely candidate, as Chrysler's liabilities far outweigh what the Canadian company may be able to manage.
Although there have been no formal bids or announcements, sources have indicated that private talks with one of these groups will begin sooner, rather than later, most likely sometime next week.
[Source: Detroit News]
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Reader Comments (Page 1 of 1)
Be Oh Be @ Mar 30th 2007 9:34AM
Okay, you guys must be Genesis fans - I've seen 2 references to Genesis this week.
Richard @ Mar 30th 2007 9:44AM
Three equity firms? If this is the best that Chrysler can do, then you can get out your butter and jam. It's toast.
rgseidl @ Mar 30th 2007 10:17AM
@Richard: Magna isn't an equity firm but it is reportedly partnering with one in its bid. The Canadian supplier depends on Chrysler for 24% of is revenue and has expertise in building and even designing complete vehicles thanks to its outsourcing operations in Austria.
Still, I'm rather hoping Magna will not increase its bid because it may be biting off more than it can chew. It might make more sense to invest the money in the already-planned expansion into tomorrow's growth markets: India and Russia.
Mr. Oak @ Mar 30th 2007 10:43AM
Chrysler is going to be fine eventually. Especially now that the clueless Germans are almost out of the picture. Hope they learned that running a large car company is not the same as running a small or mid-sized one. A lesson Toyota is also learning fast.
That "ugly" little thing that replaced the Neon seems to be selling well. Showing up in increasing numbers on the streets of New York and it's surrounding suburbs. This car just does not photograph well. It's actually quite a nice little car in the flesh. Looks better in the lighter colors. It's best asset is that it has character, wouldn't get lost in a pack of Civics, Corollas, Sentras and whatever it is that Hyundai sells in that segment. Then there's the SRT4. King DaDa of the FWD pocket rocket set.
The 300 needs to be refreshed and refined, polish up the cardboard cut-out interior.
Don't care what they do with the Charger, never did like the damn thing.
Too bad about the Sebring, it's unfortunate that they saddled it with such a hap-hazzard design and then try to shove it into the most hotly contested segment of the market. They need to start the redesign post-haste. Lose half of the busy-body styling cues, ecpecially those @E#$^ creases in the hood. Also all of the external light fixtures are disproportinate (too freaking big) with the size of the car. Both ends of the car looks awfully crowded.
On the SUV/CUV side of things, they are light years behing the competition. They need get to work, and start designing vehicles as if the lives depended on it, because it actually does.
felipe @ Mar 30th 2007 11:30AM
"Then there's the SRT4. King DaDa of the FWD pocket rocket set"
KING?? that cheap POS. they stopped making that thank god.
that was only king to the under 20 crowd whos mom would buy them a car.
felipe @ Mar 30th 2007 11:34AM
anyhow, who ever takes the reigns, needs to trim the line up of too many 'like' vehicles they have and then FOCUS on 1 thing at a time.
A&W @ Mar 30th 2007 11:43AM
It seems like these bidders would be great at balancing (cooking?) the books. But making good cars? I'll believe it when I see it.
KC @ Mar 30th 2007 12:16PM
Magna still IMO is the best choice as they actually have real expertise (they didn't just buy their way into the game) in the automotive industry and they are already a close partner with Chrysler.
Of Course Tom LaSorda supports the group that promises not to oust him or his fellow execs but, maybe they need to go so I'm crossing Blackstone off my list of groups to cheer for.
Cerberus has a cool sounding name, but they just bought their way into the automotive game and I have little faith that they'd do anything more then slash and hack Chrysler to bits for profit. I don't want to see Chrysler end up sharing The Rover Group's fate.
So GM has been cut out of consideration already? Or were they ever really interested to begin with?
iQuack @ Mar 30th 2007 1:38PM
I don't know why anyone would buy a new Chrysler car unless it could be purchased very cheaply. The company is "in play" and who knows what components will be in Chrysler cars in a few years?
One of the reasons people chose one car over another is the perception of the company that builds the car. Why buy a car when you don't know who it's parent will be in the near future?
There's nothing special about Chrysler cars anyway except poor rear visibility in the Sebring and Avenger. Almost every one of these cars I see around here is a rental, so expect good deals on used ones when they're dumped into an unwelcome used car market.
If you want one of these clunkers, buy it from Thrifty Car Rental in 18 months--and hold out for a loooooooooow price!
c @ Mar 30th 2007 4:23PM
Just like ton's of camry's,accord's around here are mostly rental's,My car was just stolen so I just got a crappy accord rental complete junk!!! and the rental car sale's lot is full of camry's,yaris,civic and accord.I've driven them and aint nothing special about any of 'em.I wish I did get a new avenger or sebring cause my last sebring rental drove and handled way better than the accord!!
owen @ Mar 30th 2007 8:34PM
10. Just like ton's of camry's,accord's around here are mostly rental's,My car was just stolen so I just got a crappy accord rental complete junk!!! and the rental car sale's lot is full of camry's,yaris,civic and accord.I've driven them and aint nothing special about any of 'em.I wish I did get a new avenger or sebring cause my last sebring rental drove and handled way better than the accord!!
Posted at 4:23PM on Mar 30th 2007 by c
um yea ,looks like somebody missed snack time ,dude get back to your senses
iQuack @ Mar 31st 2007 1:55AM
10. Just like ton's of camry's,accord's around here are mostly rental's,My car was just stolen so I just got a crappy accord rental complete junk!!! and the rental car sale's lot is full of camry's,yaris,civic and accord.I've driven them and aint nothing special about any of 'em.I wish I did get a new avenger or sebring cause my last sebring rental drove and handled way better than the accord!!
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Right! And pigs have wings and I'm the Easter Bunny.
John D @ Apr 21st 2007 8:11PM
Comment No 9 hits it right on. And that is why this is so unfair. Chrysler reportedly had 12 billion in the bank when Daimler purchased them. They also reportedly make good money with their finance arm. Supposedly Daimler grabbed the 12B in cash and no longer accounts for that surplus as Chryslers, and the finance arm profits do not go to Chrysler. Both of these moves make Chrysler look more like a liability than it really is.
Chrysler is in play because some folks at Daimler flat out dislike it -- and as a result of this, no care is being exercised in keeping the possible future ownership(s)of the company secret. All of this in my opinion kills morale, and makes the company even less valuable. Its almost as if Daimler is taking a borderline division and doing all it can to turn it into the American version of Rover!
I mean, you just know any talented folks at Chrysler are sending out their resumes....and that is not going to keep Chrysler in business no matter who buys them. You want to keep the good people, and that just does not appear to be a priority.