Filed under: Chrysler, LLC., Daimler, Earnings/Financials
It's official: Chrysler Group for sale, Zetsche in talks with potential buyers
In February, Reuters reported that Chrysler was putting together a prospectus for potential buyers of the company. Today, Bloomberg reports that Dieter Zetsche has admitted to working on a sale of Chrysler Group.
Zetsche wouldn't say who the bidders were, but they are supposed to include private equity firms Blackstone Group LP, Centerbridge Capital Partners LLC, and Cerberus Capital Management LLC. Magna International, Inc., the Canadian company that supplies DCX, GM, Ford, VW, and BMW, among others, is also known to be among the potential buyers. While all options are on the table, this won't be a fire sale: DCX wants $8 billion for Chrysler – a substantial reduction from the $36 billion dollar takeover – as well as a plan any buyer for "sustainable" profitability, employee considerations, and making Chrysler competitive. With those demands, and new contract negotiations looming with the UAW, a quick sale is not a foregone conclusion.
In spite of Zetsche forecasting "significantly" increased profitability over the next two years and with 20 new vehicles to be unveiled from now until 2009, after last year's $1.5 billion loss and a 3.2 percent reduction in market share since the 1998 "merger," shareholders have had enough. DaimlerChrysler expects to select a sole negotiating partner by the end of April.
[Source: Bloomberg]
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Reader Comments (Page 1 of 2)
DPC car videos 3:11PM (4/04/2007)
I don't understand, Chrysler has been making some nice cars in the recent past yet couldn't hold its own. I wonder who will be the buyer.
http://www.dpccars.com
DPCcars
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aman 3:19PM (4/04/2007)
GM is considering buying Chrysler, I think. but with this roll they're on, I don't think it would be wise to buy. besides, if one of the Big 2.5 bought the other, it would destroy the competition between them, which has been the longest and most competitive rivalries between them.
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JC3 3:23PM (4/04/2007)
Spent 36B and wants 8B(for Chyrsler).Whew,there's a story in a story.
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Puff Chippy 3:30PM (4/04/2007)
Are these numbers right? MB bought ChryCo for $36 billion and is now trying to sell it for $8 billion? I hope the execs that orchestrated this purchase back in 1998 (and got rich off of it) get fired for wasting this kind of money and making such a poor management decision. Alas I doubt they will as execs always protect their own, I just know that if the common guy screwed up this royal he'd be terminated without question.
Is it just me or is the new trend in corporate America to buy and sell companies willy-nilly, fire the common workers at will, then make the execs who put it all together filthy rich? Looks to me like one giant shell game and the 99% of us suckers that actually go to work each day are taking it in the shorts while these corp execs take us for every penny we have.
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Bryan 3:31PM (4/04/2007)
I sure hope an American based company (or person) buys Chrysler.
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Mr. Oak 3:31PM (4/04/2007)
I think GM wants in. Read a Bob Lutz interview this a.m. in the NY Times. Here is the Question about Chrysler:
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Taylor: I can't resist asking if the rumors are true that General Motors is interested in buying Chrysler.
Lutz: Well, I can't comment on that oficially. Let's put it this way Rich, There is a need for consolidation in the automobile business. The problem wioth the current Daimler-Chrysler merger is that when you are operating in two different georgraphies, at the opposite ends of the price and prestige ladder, there are limited opportunities for synergy.
There are two things that they don't want to do; advertise that all Chryslers are built on Mercedes architecture, or advertise that all Mercedes are built on Chrysler architecture. Both are equally damaging. So they have to run a complete company in the U.S. and a complete company in Europe. There is no synergy.
There would be advantages for General Motors to acquire Chrysler. We could eliminate the duplicate functions and over time, we could consolidate our our architecture with huge savings. The last time this worked, was when Chrysler took over American Motors.
Taylor: And now, the crown jewel at Chrysler is the Jeep division, which they got with American Motors.
Lutz: Everybody would agree that Jeep is their strongest brand. It's one of the best-known brands in the world. We could consolidate a lot of Jeep architecture with Hummer for instance. I think financially, somebody will figure out how to make Chrysler work. But I can't really comment on whether General Motors is interested or not.
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SpeedCostsMoney 3:34PM (4/04/2007)
I'll buy them for a dollar.
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Ethan 3:42PM (4/04/2007)
I'll buy them for TWO dollars.
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James Valley 3:56PM (4/04/2007)
They didn't waste all that money...
They saved in many ways (combined negociations with suppliers, for instance, and smaller development costs in -not many, maybe- shared parts), but most importantly, they aquired the necessary know-how from Jeep to build their own range of 4x4 and crossovers.
So, it wasn't a complete loss, I guess...
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tariq 3:58PM (4/04/2007)
I'll buy them for five dollars.
Six anyone? Lets start the bidding here
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iamhoff 4:00PM (4/04/2007)
Try this one. Maybe the UAW should buy Chrysler. Seriously, how great would it be watching them attempt to stay afloat while being subject to their own labor practices? You can bet that dues for workers at other manufacturers would be raised to help offset those "unforseen" costs that would no doubt arise. It would be unfortunate to sink Chrysler, but imagine how great it would be if the entire union went under!
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CJ 4:02PM (4/04/2007)
What a waste of time.
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Todd 4:12PM (4/04/2007)
GM buy Chrysler? Why? So they can sell more of the same cars with a few new badges on them? That's not what synergy's about.
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wally 4:55PM (4/04/2007)
A. Chrysler goes private Magna take over production Daimler keeps 15%.
B. GM buys Chrysler Dailmer gets 15% of GM.
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JC3 5:15PM (4/04/2007)
Gee, PuffChippy #4.I think You hit the nail on the head!I think that's probably also why they Japanese car companies are so sucessful,because the're CEO's are married to the companies and don't sell them out.American corperate culture is get what you can and get out.
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100MPG ASAP 5:20PM (4/04/2007)
Wow! MB spent $36 BILLION and they want to sell now for $4-8 Billion.
Germans may build magnificent luxury cars but they are not good investors :)
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Barney 5:32PM (4/04/2007)
"they aquired the necessary know-how from Jeep to build their own range of 4x4 and crossovers."
You do know James, that Daimler has been making 4X4s for over 1/2 century and the Unimog is just one example. I'm sure the German engineers don't need "Jeep" as a template.
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Barney 5:40PM (4/04/2007)
RE:5. I sure hope an American based company (or person) buys Chrysler."
Posted at 3:31PM on Apr 4th 2007 by Bryan
Why? What would Americans want with yet another loosing proposition? They have trouble enough staying ahead of the Japanese and Korean competition, let alone the new Chinese invasion. Ever government and businessmen couldn't keep Chrysler afloat and it will take a whole redo to make it work now.
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Ryan Crawford 5:56PM (4/04/2007)
Chrysler, Dodge and Jeep are the best car cpmpany's out there, have more power then all the vehicals out there! the only problem with them is that they suck down the fuel! and I think all you chevy and ford guys should be watching out for the fucking chink vehicals cuz there kicking all domestics asses! FUCKING GAS PRICES
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waLLy 6:13PM (4/04/2007)
who the bar-jeezus is Ryan Crawford?
Anyway, this'll be cute. I can just see Robert Farago doing a little dance in front of his PC at this very moment.
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