What's Chrysler worth to Daimler? Zip, Zero, Nada, Donut
So, just what is a 19.9% stake in America's third largest automaker worth? Um, nothing. So says Daimler, which owns exactly that amount. The German company claims that, for accounting purposes at least, there is absolutely no value in its part-ownership of Chrysler. Just about a year ago, Daimler estimated that its share of Chrysler was worth some $1.17 billion. The remaining 80.1% was sold to Cerberus Capital Management last August for $7.4 billion.According to Chrysler, Daimler's idea of its stake in the company is a totally different animal than its own. The two companies use different accounting techniques to arrive at earnings figures and net worth, and the privately-held American automaker doesn't release its internal figures. As we've covered, Daimler is currently in talks with Cerberus to rid itself of any attachment to its former partner by selling its remaining shares of Chrysler to the American company, which it would need if it were to make any sort of deal with General Motors, Renault or any other automaker for that matter. So, just how much is Chrysler worth as a whole? We could soon find out.
[Source: The Detroit News]
Reader Comments (Page 1 of 1)
MachinaDC5 5:05PM (10/24/2008)
I have a nickle here with Chrysler's percent written all over it. I'll take it off your hands for a nickle, how's that, Z?
Actually, I may be better off with the nickle...
Reply
Jared 5:46PM (10/24/2008)
Actually, I'm sure you would be far better off keeping your nickel. In 2007, Chrysler had an $18B liability to for retiree pension and health care obligations.
AZZO45b 7:01PM (10/24/2008)
18B? They lowered that when they dropped retiree life insurance & cut much of that healthcare "liability"
Enjoy your golden years...
Todd 5:05PM (10/24/2008)
I would apply Dr. Z's evaluation to GM and Ford as well.
Don't have the numbers to back my opinion up since all three domestic makers are hiding their catastrophic debt so well.
Reply
Noidor 5:13PM (10/24/2008)
It's not exactly a secret that GAAP is a complete joke in relation to accounting methods used elsewhere. Yet another reason why US economy is so damn fake. Everything is LIFO!
Reply
J M C 3 6:03PM (10/24/2008)
Benz has got to be glad they got out when they did.
Reply
John P. 5:46PM (10/24/2008)
Funny coming from one of the guys who made Chrysler worth nothing. Dr. Z. is a barely functional idiot and probably should be working at McD's instead of running a car company.
Reply
Andrew 10:49AM (10/25/2008)
And may I ask where you got your doctorate?
Your hate for the man should at least have some reasoning behind it. He probably did more to save Chrysler than you did.
John P. 2:13PM (10/25/2008)
Alright, I'll give you some reasons why he's an idiot.
Before Daimler/Chrysler
1. Chrysler = Profitable
2. Higher Initial Quality Ratings than Mercedes (Yeah I know hard to believe) based on defects per car.
3. Higher Profit per Car than any other domestic offering.
During Daimler/Chrysler Debacle.
1. Profits from Chrysler spent saving sinking Benz, neglect Chrysler
2. No real development $ spent on chrysler
3. Quality went down, finally below Benz, Yippeee!
4. Marketing Campaign sold "German" Engineering for Chrysler cars. "Don't Insult Us!"
5. People wised up to nonsense and stopped buying based on all of above.
Daimler Ran away from a sinking ship and lost Millions (Smart Move Dr. Z!) Shouldn't have bought them in the first place.
OK, maybe he's not an idiot, but he makes stupid decisions.
greg 5:50PM (10/24/2008)
Well its your life.
Joke at American industry joke at your future.
Keep right on buying foreign products that are actually worse than American products.
Reply
James 6:18PM (10/24/2008)
The last American product I purchased (1999 Grand Cherokee) was a POS. The replacement SUV's (2003 Honda CRV, 2008 Toyota Rav4) are far better.
Now they are different vehicles but the quality along with fit and finish is amazing.
I could care less about Chrysler and their products after purchasing one in the past.
Bye Bye Chrysler/Jeep/Dodge, Hello Honda, Acura, Toyota, Lexus.
AZZO45b 7:09PM (10/24/2008)
Greg: I'm quite happy with American industry... American Honda in Marysville Ohio have been building very good stuff. My neighbors seem to like their American built Camry too.
Please, spare us the Buy 'Merican nonsense. Many of my neighbors just bought ultra cheap Chrysler cars made in Canada & Mexico... what do you say to them?
Chrysler was German owned for 10 years... did you boycott them during that time? Just askin'
Big Rocket 7:36PM (10/24/2008)
@AZZO45b: Actually, greg did boycott Chrysler. After all, he owns a Toyota.
greg @ Oct 17th 2008 3:01PM wrote: "I own a toyota and now that I see american econ is not doing so well I am going to start buying american again."
http://www.autoblog.com/2008/10/16/honda-reveals-all-new-jdm-odyssey/3#comments
halogenrep 11:23PM (10/24/2008)
Good for you, greg. I agree with you that some of the latest American cars are pretty darn good. I can't wait for the new Ford Fiesta and possibly Mondeo (Taurus). The look of the new Lincoln sedan is better looking than Lexus and I like the new Ford Edge as well.
TriShield 10:06PM (10/24/2008)
AZZO45B, Honda making a car in Ohio isn't the American auto industry. Please spare us your Japanese car is assembled in America so it must be magically American and you buying it is making everyone else and our economy dandy nonsense.
It's the product of a foreign company that simply assembles it here and takes the money home. Products like my Zune are assembled in China but that hardly makes it the product of a Chinese company and it certainly doesn't benefit any single Chinese company instead of Microsoft here in the US. The same with Apple and so on. Those foreign automakers also don't employ a fraction of the Americans that the American automakers do.
All American automakers build the VAST majority of their products in the United States. In fact the legacy of their starting the entire industry from scratch a century ago and owning it for decades is one of the things killing them now. They have far too many US plants, employees and the immense legacy costs that go with it while losing their customer base necessary to keep it all solvent.
The fact is as Americans stop supporting American companies other Americans employed or linked through suppliers and business dependent on them are going to suffer as they go down and so is our economy. There's no second guessing or excusing that away.
Look at the sheer amount of facilities and people GM employs in the US alone.
http://www.gmdynamic.com/company/gmability/environment/plants/facility_db/
Ford and Chrysler aren't any different.
Chrysler had German ownership but it hardly contributed in Daimler's bottom line and it didn't change that Chrysler was wholly American operated just as it was before and now. In fact Chrysler sucked billions out of Daimler before the marriage was done.
It's the same for Ford's ownership of British automakers, they are still completely British and run solely out of Britain just as they were before. Except they were sucking money out of Ford here in the US like vampires.
Daimler's legacy with Chrysler is that they took a vibrant and talented US automaker and left it a husk and lined it with horrific management on the way out. The company is probably done and it's a shame.
When it collapses it's going to cost everyone in th end, don't kid yourself on that.
Reply
AZZO45b 10:48PM (10/24/2008)
TriShield: Almost missed you... since you replied a few down. Chrysler didn't contribute to Daimler's bottomline??? WTF are you talking about. The year after the "Merger of Equals" CHRYSLER contributed to the BLACK INK of DaimlerChrysler. Their reported 12-15 BILLION in cash helped the bottomline as well. MB was able to R&D future product with Chrysler's cash.
I will give you GM having a helluva lot of N/A manufacturing I'm not as well versed with Ford production... but Chrysler? Most of their profitable cars were made in Canada & Mexico. They closed the U.S. based mini van plant & kept the newer Canadian one open. Their scheduled upcoming small car will be a Nissan. The once profitable truck plants are in the USA... but shift cuts & plant closures are not helping Americans much right now.
The American industry is the people who engineer, design, market & yes BUILD/ ASSEMBLE these products. American skill is used by Japanese companies just like American companies. This logic of the money going back to Japan, Korea or Germany means NOTHING! Unless you are Kirk Kerkorian or an ultra rich investor in these companies. Taxes are collected by the federal & state governments on foreign & domestic companies... who pay their employees in US Dollars that are spent in the US economy.
The makers of your Zune in China benefit... the workers earn a living assembling & then shipping them to customers around the world. If Zune chooses to make its product in Taiwan or India to save costs... the Chinese worker loses.
Honda has been in Ohio for 25 years... you don't think they have people who have retired? Honda R&D is also in Torrance CA... I'm sure they now have American "legacy" costs. Check your figures on employees for Honda, Toyota, Nissan & Kia/ Hyundai. (Plants & R&D centers...) Especially with GM. Ford & Chrysler slashing their blue & white color workforces.... you will find its more than a fraction
FFS 11:43PM (10/24/2008)
How brainwashed are we..if theres 100 people in a plant working for Honda instead of Ford its the same to the economy...the only difference is the big profits do go back to japan, but since when have the Fords, Rockefellers etc given money back to the americans ?? they probably use their profits to buy themselves bugattis and ferraris..
AZZO45b 12:10AM (10/25/2008)
Thank you FFS... your short response should have been mine!
Frank 10:08AM (10/25/2008)
Dieter *&$^%, %#&$@, F*#&ing, Zetsche.
'nuff said.
Reply
jc 11:48PM (10/26/2008)
What happens when you make poor quality cars and trucks, make current designs that no one cares about (the 300C & Challenger are the exception), do not adjust to the changes of the consumer market and continue this pattern over and over again for decades? You get the disaster called Chrysler. Mismanagement and arrogance have led them to where they are now. I pity all those workers and their families who lost their jobs.
Reply