vrazzhledazzle

It's official. Chrysler's up for auction...NOT?

247 posts in this topic

March 07, 2007

Here is a link to an article posted by DBeaSSt. :huh:

http://news.yahoo.com/s/nm/20070307/bs_nm/...w_chrysler_dc_1

March 01, 2007

In Chrysler's For-Sale Saga, Another One Bites the Dust

SHANGHAI, China — China's largest auto group, SAIC, said it has no plans to buy Chrysler or any other overseas firm. The company was responding to media reports that it has been talking with DaimlerChrysler.

Two years ago, SAIC acquired a controlling interest in Korean utility-vehicle make Ssangyong, and the company also holds a minority interest in GM Daewoo.

Reuters quoted an SAIC spokeswoman as saying, "We have no plans for acquisitions at the moment." :)

Another rumored Chinese suitor, FAW, also denied interest in buying Chrysler, joining such multinational car companies as Volkswagen, Fiat, Renault-Nissan and Hyundai in throwing cold water on rampant media speculation. :)

At the moment, General Motors appears to remain the sole automaker with an interest in Chrysler. The Financial Times reported earlier that DaimlerChrysler might take a stake in GM as part of a possible deal involving Chrysler.

What this means to you: With the Chinese, it's not a question of money. With Chrysler, it is starting to be a question of who's left.

http://www.edmunds.com/insideline/do/News/articleId=119807

February 26, 2007

DCX could swap Chrysler to GM in exchange for a stake in the General

This is getting weirder by the moment. Now reports out of London suggest DaimlerChrysler is looking at taking a minority stake in GM as a means of off-loading money-losing Chrysler. The deal would work something like this: GM takes over Chrysler and in return DaimlerChrysler buys GM stock. Basically, DaimlerChrysler would give GM the money to buy Chrysler.

The way the analysts play it, GM gets Chrysler without spending cash, and DaimlerChrysler ends up owning a slice of a GM/Chrysler combine. Now, I’m no finance guy, but I’m struggling to see exactly why this would be a good deal for GM.

In an earlier blog, I maintained there was simply no upside in Chrysler for GM. That’s still the case.

Most of Chrysler’s product lineup competes directly with GM models and Chrysler brands are far weaker globally. There could be some savings in purchasing generic parts, but proper platform sharing scenarios would take at least a decade to put into place. And then there are the issues of over-capacity and legacy costs: Both GM and Chrysler need fewer factories in the U.S., and both are paying a fortune in health care costs and other benefits that makes them uncompetitive with other automakers. Rolling Chrysler into GM doesn’t solve these problems. It only makes them bigger.

Functionally, Chrysler is a basket case, for a bunch of reasons. Through most of 2006, its senior management team pursued a disastrous policy of keeping the factories churning out vehicles that weren’t selling, and stockpiling them on lots before forcing them on reluctant dealers with deep discounts that destroyed their resale value. The “sales bank” idea didn’t work in the 1960s. Forty years later, Chrysler’s bosses have proven it still doesn’t work.

The design leadership Chrysler assumed in the 80s and 90s has been lost to GM and Ford. Exhibit A: The new Sebring, a lumpen mish-mash of over-wrought Crossfire cues. Then there’s the new Dodge Avenger, Jeep Compass and Commander, the boxy new minivans – none of these vehicles has the style, grace and flair we came to expect under Tom Gale.

A couple of commentators suggest the cost, aggravation and distraction of GM taking over Chrysler would be worth it to get hold of Jeep and the minivan business. I just don’t see it.

Jeep is still a fabulous brand, despite DaimlerChrysler’s best efforts with vehicles like the soft-road Compass (not just bad to look at and cheaply finished, but so off-brand it would devalue the Jeep name if enough folks actually bought one) and the Commander (an ugly box that singularly fails to do the one job it was allegedly designed to do – have useful third row seating). But if GM seriously thought there was a lot of money to be made in building trail-rated SUVs, it could make Hummer work a whole lot better for a lot less money.

Some goes for the minivans. Sure, it’s a sizeable market segment. But Chrysler’s leadership position – held out as a juicy plum for GM to pick – is now due more to market inertia than any real product innovation. Maintaining that leadership against automakers like Toyota and Hyundai is going to require ever increasing levels of investment over the coming years.

Minivans are increasingly becoming commodity vehicles; you won’t be able to charge a fat premium for them much longer, which favors the low cost Asian producers. What’s more, the generation of kids that grew up riding around in minivans is less likely to want to drive their mom’s car when they grow it. Yes, the minivan could go the way of the station wagon. This is precisely the wrong time for GM to jump back into the minivan business.

After years of mis-steps and wrong-headed management, GM is now starting to coalesce into a focused automaker with effectively leveraged global resources. Chrysler’s problems are all short-term problems, and a distraction GM management just doesn’t need. GM needs to be thinking about – and spending money on – long term stuff like hybrids, diesels, weight reduction, CO2 emissions. Doing that, rather than taking on the Chrysler mess, it what will make GM a stronger company in 20 years’ time.

http://blogs.motortrend.com/6203303/editor...saga/index.html :blink:

DCX to launch $13 billion auction of Chrysler; Hyundai not interested

U.S. investment bank JPMorgan is making final preparations before starting an auction of the Chrysler Group on behalf of DaimlerChrysler, according to a report by the U.K.'s Times. The news follows a shocking report from last week suggesting General Motors might be considering buying Chrysler.

While reports of a possible Daimler-Chrysler de-merger were met with much skepticism in the auto industry, rumors continue to swirl, with no official denials coming from GM or DaimlerChrysler. Typically, automakers issue statements to the press rejecting rumors of this magnitude, if they are false.

The Times report also indicated Korean automaker Hyundai might be interested in buying the group. Hyundai swiftly issued a statement saying its "hands are full" and it has no intention of buying the American company.

Currently, General Motors is the only party known to be in talks with DaimlerChrysler about an acquisition. GM is said to have particular interest in Jeep and Dodge, but would consider buying the whole group if necessary.

Such a deal would result in a close integration of the Chrysler Group into the GM family, with overlapping products being axed, possible rebreeding, and the pairing of compatible brands like Jeep and Hummer.

JPMorgan will reportedly send information memorandums to a number of potential suitors as soon as the end of this week. If sold, the Chrysler Group would likely go for $13 billion, the report said.

http://www.leftlanenews.com/2007/02/19/dcx...not-interested/

____________________________________________________________

February 23, 2007

UPDATE:

Chrysler Rumor Mill Reaches a Fever Pitch

DETROIT: Even as Chrysler Group CEO Thomas LaSorda sought to soothe the company's uneasy employees via e-mail, media speculation over the ultimate fate of Chrysler reached a frenzied pitch on Friday.

Volkswagen was the latest multinational carmaker to deny an interest in acquiring the ailing U.S. auto group from parent DaimlerChrysler. DCX Chairman Dieter Zetsche triggered the initial spate of publicity with his announcement that the company would pursue "all options" in response to Chrysler's financial skid, including a spin-off or sale.

In Europe, the Financial Times reported that at least four private-equity groups are holding preliminary talks to buy Chrysler. Reports in Europe say DaimlerChrysler's asking price is 10 billion euros or about U.S.$13 billion.

Among the U.S. private-equity groups said to be in discussions with DaimlerChrysler are Apollo Management, Blackstone Group, Carlyle Group and Cerberus Capital Management. The auto unit of Cerberus is run by David Thursfield, an auto-industry veteran who once ran Ford's European operations.

VW joined a string of corporate deniers that now includes Fiat, Hyundai, Mitsubishi and Renault-Nissan. In response to press speculation, all have said they have no interest in acquiring Chrysler, which posted an operating loss of $1.5 billion in 2006.

Press pundits also suggested that one or more state-owned Chinese automakers could be preparing to make a bid for Chrysler. Prospective bidders could include First Auto and Shanghai Auto, the country's two largest carmakers.

Another oft-rumored suitor, General Motors, has declined to comment on media speculation that it has discussed a possible platform-sharing arrangement with Chrysler, similar to the deal under which Chrysler next year will provide VW with a version of its redesigned 2008 Town & Country minivan.

In Detroit, LaSorda has sought to reassure nervous employees and dealers with a series of e-mails and conference calls, according to local press reports.

Chrysler began sending out terms of its latest early-retirement and buyout packages, which aim to cut 13,000 blue- and white-collar workers from the payroll. The initial package, which is being presented only to salaried non-union employees, offers early-retirement incentives to workers as young as 53. Chrysler hopes to eliminate 1,000 white-collar jobs by June and another 1,000 by 2008. The company's contract with the United Auto Workers expires later this year.

LaSorda told employees that a potential deal to sell or spin off Chrysler could take "months" rather than weeks to negotiate.

What this means to you: Don't be surprised to see Chrysler wind up in the hands of a major U.S. investment fund. :thumbsup:

http://www.edmunds.com/insideline/do/News/articleId=119720

And another article that sort of compliments the above one.

Analysts say 50/50 chance for GM-Chrysler tie-up

General Motors stands a 50 percent chance of buying Chrysler, Jeep, and Dodge from DaimlerChrysler, according to Merrill Lynch analyst John Murphy, who said such a move would be a "defensive maneuver."

"Given the transformation the U.S. industry is beginning, we would not rule out a tie-up," Murphy said in a memo to investors today. "GM may view the acquisition as a defensive maneuver to box out new competition."

With Toyota's sales climbing, GM's "global volume lead is certainly in question," he said. "The acquisition of Chrysler would certainly allow GM to maintain its crown for many years to come."

Chrysler could add as much as $9 billion in value to GM due to products and "operating efficiencies including reduced research and development and advertising costs per vehicle," Jon Rogers, an analyst at Citigroup.

The UAW might also be more willing to make concessions if Chrysler is owned by an American company rather than a foreign one, Rogers said.

http://www.leftlanenews.com/2007/02/20/ana...hrysler-tie-up/

FIAT S.p.A

HYUNDAI-KIA

NISSAN-RENAULT

MITSUBISHI

VOLKSWAGEN AG

GAZ (Russian)

BMW GROUP

TOYOTA http://www.marketwatch.com/News/Story/toyo...33914A4758EA%7D

SAIC/FAW Source

So far, all the above have explicitly said they have no interest in Chrysler which unfortunately supports the above-quoted article.

Apollo Management

Blackstone Group

Carlyle Group

Cerberus Capital Management

General Motors

So far, all the above are though to have expressed interest in the Chrysler Group.

DaimlerChrysler : There is still a possiblity that Mercedes and Chrysler remain together according to some reports.

Edited by vrazzhledazzle

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ZL-1    160

13 Billion? Thats it? :nono:

Depends on what they're selling, e.g. if some of DCX's debt is being passed on to the buyer. Edited by ZL-1

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Yeah.... funny how "little" it seems in the grand scheme of things.

I do not hate the idea of GM buying Mopar but it would not be a

smart move right now, plus there's more cons than pros IMHO.

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Mr.Krinkle    0

No one is interested in Chrysler. Daimler wants it gone asap because its starting to suck the life out of mercedes. BMW, audi and others are pulling ahead because of it. It is putting them at a disadvantage that will continue until its gone.

Any price will be good enough.

The auction is a way to draw GM out into making a decision sooner than later. The five billion number has been bandied about and at that price it probably is a steal. Fritz Henderson may be one of the best things to happen to GM in a long time.

You know hes been hatching a scheme to make this do-able..

For no other reason than they have showed an interest in this tells me they know something we are probably missing.

I wonder how W.P. Chrysler would feel about his old bosses buying out his company. Sounds like old school GM.

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Cadillacfan    0

It's sad that Daimler executives couldn't stick it out any longer and try to save the Chrysler arm of the company considering that Benz has been doing so well these past few years and allowing the company as a whole to turn a decent profit.

I guess if they, a german based company, can't fix the problems of the American branch, it sort of proves that GM and Ford's difficulty to turn things around quicker financially has really little to do with incompetence of the Detroit executives but more to do with the overall environment of the US automotive industry and all things related to that field. Very little help from federal and state governments in terms of taking over some pension and healthcare costs, constant and sometimes unfair criticism by the American automotive press, and the continuous assistance to foreign companies to build their factories here aren't helping the matter.

Getting back to the topic at hand, GM should have nothing to do with this. Who wants to take on that much responsibility when they're still trying to fix their own failed business model.

Edited by Cadillacfan

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CARBIZ    1

When I had originally heard that Daimler was "merging" with Chrysler years ago, I thought at the time that it was a marriage made in heaven. I figured Chrysler could teach Daimler to design vehicles quicker to market, their new design center was a dream, and that Daimler could fix all of Chrysler's engineering woes - plus, Chrysler got access to Europe and Daimler had access to North America.

What the hell happened? This marriage of equals should have created an engineering/design powerhouse. Instead, we get this mess.

If GM can get Chrysler for the right price, I guess their are synergies here. I certainly understand GM's concern not to let VW, Hyundai or anybody else get their hands on it. Sometimes, the smartest thing to do is close out your competitor, or just not let it fall into other competitor's hands.

I would be a very rich man today if I had followed that advice 17 years ago when I had my own company.

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AxelTheRed    0

So, if no one buys it, then what...?

Then its probably the end of Chrysler.

A little red ink and they're off to the auction block. Such commitment.

Edited by AxelTheRed

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ZL-1    160

marriage of equals

I think a big part of the problem is people believed a 'merger of equals' would actually take place. IMHO, 'merger of equals' is a concept fit for a marriage, not business deals.

So, if no one buys it, then what...?

Whatever is cheaper: restructure its way to profitability, shut it down or let it die a slow death.

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andy82471    0

Let us just face it; there are just too many companies trying to make and sell automobile for a living. And like the rule of the jungle, only the strong survives. It could very well happen that five years from now GM is the only true American auto company remaining. Ford and Chrysler would only be a memory by then. I seriously hope that doesn't happen because fair competition actually benefits the customers. I don't want Toyota and Honda to be the only automakers in the world. That would be very bad for consumers everywhere. I have no idea why a company like Daimler Benz with its legendary history couldn't run Chrysler Motors.

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Intrepidation    846

Not long ago it was Chrysler being profitable and saving the company's ass while Mercedes was up $h! creek because of their horrible quality problems. Chrysler has a few bad months and now their up for auction. I really hate the bastards in Germany who'd rather take the easy way out than commit. The merger was a bad idea to begin with. Honestly, if someone had to buy it I guess it should be GM since at least that would make Chrysler American again. But that would just make the company another brand for GM, not a real company anymore. Plus GM has enough brands to worry about, the last thing they need is more. I wish they'd just split Chrysler Group away from Mercedes and allow it to be it's own company again.

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VenSeattle    8

Funny... skip back a few years ago, and there was a law suit requesting this to be done. Now, they're having problems giving Chrysler Group away.

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So, if no one buys it, then what...?

Well remember guys, the article says the Chrysler group is up for auction, I'm sure they could auction parts of it if necessary. If Daimler is desperate enough to get it off their hands they would split the brands up. I remember reading that last year MBenz made a $1 Billion and Chrysler (just that one brand) lost $1 Billion. I don't think Jeep and Dodge are that unprofitable (I think they actually made a profit?).

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PONTIAC06    22

If GM is really "particularly interested" in Dodge and Jeep, then I'm sure that they can get just those brands at auction if Daimler is as desperate as they sound. I'm just wondering if that were to happen, where would that put Chrysler? To be picked up by someone else, or will it just die?

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Northstar    11

Why would GM be interested in Dodge? I guess that would give them a minivan, but GM already has products in every segment Dodge does, and most Dodges suck. Jeep, I can see them buying.

I guess the Ram, Silverado, and Sierra could all share a platform too, but Dodge cars and Pontiac cars overlap way too much. Charger and G8, Avenger and G6, Caliber and Vibe, Nitro and Torrent. I just don't see that working, unless Dodge is becoming the Durango off T900, Ram off T900, Grand Caravan, and I guess they could keep the Caliber since the Vibe is probably not sticking around. Dodge is trucks/vans/Caliber and Pontiac is cars? That's like Pontiac/GMC though...

Essentially, this would give GM three brands with very limited product range. Dodge, Buick, and Pontiac. I say if anything, only buy Jeep. The only value I see in Dodge is the Ram and Caravan.

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Dragon    0

so what could GM actually use from Chrysler Dodge Jeep? From what I gather the Jeep brand, the Caliber & its kick ass SRT-engine, HEMI engine brand, Minivans and maybe the Nitro (cool aggressive little truck)?

They dont' really need Dodge's trucks since tehy have a full lineup of their own, brand new 900's. They could also dump the LX's (once Zeta is in full swing), and of course, there is no use for the Avenger/Sebring twins

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FUTURE_OF_GM    26

When I had originally heard that Daimler was "merging" with Chrysler years ago, I thought at the time that it was a marriage made in heaven. I figured Chrysler could teach Daimler to design vehicles quicker to market, their new design center was a dream, and that Daimler could fix all of Chrysler's engineering woes - plus, Chrysler got access to Europe and Daimler had access to North America.

What the hell happened? This marriage of equals should have created an engineering/design powerhouse. Instead, we get this mess.

If GM can get Chrysler for the right price, I guess their are synergies here. I certainly understand GM's concern not to let VW, Hyundai or anybody else get their hands on it. Sometimes, the smartest thing to do is close out your competitor, or just not let it fall into other competitor's hands.

I would be a very rich man today if I had followed that advice 17 years ago when I had my own company.

I think what happened is that the "merger of equals" failed to materialize.

I honestly think the people who spearheaded the progam of a merger of equals saw it as just that. That which you describe where the two companies would become fully integrated and thus benefit from the strong points of each organization while improving efficiency and profitability.

What ACTUALLY happened is Chrysler became Daimlers b*tch that nobody wanted to deal with. Nobody in Germany seemed to want to do anything but keep Chrysler chained and throw them a bone every once in a while. In fact, it seemed that a lot of Daimlers top guys didn't even want Chrysler around. The companies were NEVER integrated for the most part which caused 2 things. 1) Too much attention being diverted from Daimler in order to ensure that Chrysler "stays in line" and 2) Chrysler lost ALL of the late 90s momentum that had been churning since the introduction of the concept Viper.

Now, what we see is the 'neglect' of Chrysler threatening to drag the entire company into the black abiss of financial ruin. It's like a snake trying to swallow and digest a dog. No matter how much the snake tries, it just ain't gonna happen and eventually the dog will either kill the snake or injure it beyond recovery.

So now, Daimler is in a race against time to jettison Chrysler before what they think is their "core" business falls too far behind the times to catch up.

We should've seen this coming when DCX ended it's alliance with Mitsu... Remember, the original plan was to have a 3 continent automaker; MB in Germany (Controlling it all) Chrysler in america and Mitsu in asia. The Mitsu collapse and subsequent 'thumbing of their noses' of DCX looks more and more like the cracks in the DCX structure that should've signaled this.

I always thought the "Merger of Equals" was a bad idea simply because I always figured Daimler would *NEVER* take Chrysler and their "$h!ty american business model/merchandise" seriously. Now it's just VERY sad to see our industry destroyed like it is.

I would tend to agree that nothing will save the "Big 3" unless their image changes (Which is possible, especially with sub 25 year olds who think higher of the companies anyway) If the image does not change, (And I doubt it will with the amount of people DELIBERATELY working against them, one company at a time if they have to) then Chrysler is good as gone (Which, I would rather see GM buy them then let them go out) Ford will be next within 1-2 years and GM is just living on borrowed time. ESPECIALLY if the bitches in the media continue toward job #1 of promoting everything this side of China above domestics at all costs and regardless of reality.

Edited by FUTURE_OF_GM

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FUTURE_OF_GM    26

so what could GM actually use from Chrysler Dodge Jeep? From what I gather the Jeep brand, the Caliber & its kick ass SRT-engine, HEMI engine brand, Minivans and maybe the Nitro (cool aggressive little truck)?

They dont' really need Dodge's trucks since tehy have a full lineup of their own, brand new 900's. They could also dump the LX's (once Zeta is in full swing), and of course, there is no use for the Avenger/Sebring twins

Here's how I see it (Take it for what it is)

The Jeep issue is obvious... Jeep could be coupled with Hmmer which would justify Hummer moving up market to compete with Land Rover. Jeep would provide the volume to keep the "division" and dealerships relevant and profittable.

Sadly I worry about the future of Pontiac if Dodge is acquired. Dodge obviously does more volume AND has better recognition than Pontiac. Not to mention they have the performance rep (BIG performance rep) and Hemi credentials. Hopefully an acquisition of Dodge would not mean a Pontiac phase out.

I'm not sure WHERE Chrysler would fit in... It can't compromise Cadillac and it can't go Euro because of Saturn. Then there is the whole issue of Buick being the middle market division.

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MyerShift    7

This is sadder than when Daimler took over in 1998.

It makes me sick.

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FUTURE_OF_GM    26

Honestly, I think we might see an american investor come in a swoop Chrysler up (The whole company) which I wouldn't mind as long as that person knows what the hell they're getting in to or hires people who know what the hell they've gotten themselves into.

I just don't want anymore Proctor & Gambles exectuives RUINING our automotive companies...

What about Penske?

Didn't he just ink a deal with Chrysler to sell cars? Why couldn't he buy and run the company? Shelby? What about him (Although I see this less likely)

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