Autoblog

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]

Fortune's newsstand issue will soon carry the story of the Toyota Prius, and well, we've all heard it before. There are the usual anecdotes of success and failure - "stretch" goals that seemed nearly impossible to meet, engineers who had an idea that'd surely work but was likely too expensive, and real-world test failures that demonstrated the limitation of computer modeling. Essentially, it's a story repeated throughout the auto industry every day.

What's more significant - and the article does a good job of making this point - is simply that the automaker was involved in this whole process. The genius of Toyota's production systems have made itself known over the past two decades, but before the Prius, it's perhaps difficult to see where the automaker had truly produced innovative vehicle design and engineering. This isn't to say anything bad about the company's products; but they simply weren't terribly 'groundbreaking,' and that lack of design leadership was likely to catch up with them as they looked to take a leadership role in the industry. We think it's safe to say that the Prius changed all of that.