Chrysler Group is sold

[Silverback]

FRANKFURT, Germany -- DaimlerChrysler said it will sell more than 80 percent of its money losing Chrysler Group to private equity firm Cerberus Capital Management.

The German-American automaker said in a statement on Monday that an affiliate of Cerberus will acquire the new Chrysler Holding LLC but DaimlerChrysler will keep nearly a 20 percent stake.

Obligations for pensions and health care costs will be retained by the Chrysler companies.

A change of name for the company has not been decided upon.

Chrysler lost $1.5 billion last year and is undergoing a restructuring plan that will eventually shed 13,000 jobs.

The deal is likely to be complete by the third quarter.

United Autoworkers President Ron Gettelfinger said the deal is in the best interests of union workers, the Chrysler Group and Daimler.

 

[Prof]

I have confidence that the 08 viper will still hit the streets. I know that Chrysler was a step child to DC, possibly the new owners will focus more on the performance aspects of DC??? There is always trauma in change of ownership, but there is opportunity too.

This possibility has been rumored for over a year, it is interesting that DC has retained 20%...not sure if that is good or bad...time will tell. Taking the company private is going to be a much debated tactic. Everything they do to turn the organization around will be out of the public eye. While United Auto Workers has endorsed the purchase, I would not be surprised to see an attempt to kill the union ties. What a battle that would be. The union contracts are what killed Chrysler. Those contracts were agreed to by DC and so the problem was built by both entities...a private company may well try to avoid those encumbrances in the future, that would be a huge battle...but an interesting one to Ford and GM!

 

[GILMO'S10]

WHAT DO YOU THINK IT MEANS FOR DODGE/CHRYS.IN THE U.S.?
THINK IT MIGHT DELAY THE CHALLENGER EVEN LONGER?

 

[Prof]

My opinion...this is an American corporation. I would think they are aware of the interest in the new products and have done their market research ahead of the purchase. I think that product will be one of the items they want to have announce their ownership and approach to the market...I sure hope so.

 

[SinorSwim]

It means lean times for all involved. The whole concept will be reduce as much as possible, save money and get ready to spin it off for a huge profit.

Thank God Magna didn't get it. That was bad thinking on Magna's part.

Slice it, dice it and sell it off.

These new owners are not in it to be in the automotive industry, they are in it to make a alot of money and continue spending week-ends in the Hamptons. These guys don't drive Chryslers. It is all about money!

 

[streetwedg]

I am recently retired from Chrysler and i am worried about loosing my health insurance. isn't this the same company that took over Delfi?

 

[Silverback]

It means lean times for all involved. The whole concept will be reduce as much as possible, save money and get ready to spin it off for a huge profit.

Thank God Magna didn't get it. That was bad thinking on Magna's part.

Slice it, dice it and sell it off.

These new owners are not in it to be in the automotive industry, they are in it to make a alot of money and continue spending week-ends in the Hamptons. These guys don't drive Chryslers. It is all about money!

Unfortunately I believe you are right.

 

[Texas Yellow Fever]

It means lean times for all involved. The whole concept will be reduce as much as possible, save money and get ready to spin it off for a huge profit.

Thank God Magna didn't get it. That was bad thinking on Magna's part.

Slice it, dice it and sell it off.

These new owners are not in it to be in the automotive industry, they are in it to make a alot of money and continue spending week-ends in the Hamptons. These guys don't drive Chryslers. It is all about money!

Sure seems like the typical mode of operation for these kind of guys. You can bet they didn't buy it to get a dicount on a Challenger when they come out. They don't give a care about being a Chrysler employee or if it survives in the long run as long as they make the return they're looking for on their investment. They'll screw anyone they need to, to get to that end...

I hope I'm wrong...

 

[OCBob]

All I know is that if I was a DC employee I would be a bit nervous at this point. These guys will make a buck off of this deal no matter how they have to do it. If it means laying off every last swinging dick and selling every piece of equipment off that's what they will do.

That doesn't mean that it couldn't turn out good, but the potential is there for it to go south in a hurry.

 

[Silverback]

All I know is that if I was a DC employee I would be a bit nervous at this point. These guys will make a buck off of this deal no matter how they have to do it. If it means laying off every last swinging dick and selling every piece of equipment off that's what they will do.

That doesn't mean that it couldn't turn out good, but the potential is there for it to go south in a hurry.

Only good thing is that this sale will have to be approved by the govenment. You can bet your ass that the Senators and House Representatives in states that have manufacturing plants owned by Chrysler or major suppliers will be sure that they do not dismantle it.

I personally do not see that we will just have GM and Ford to choose from in the future if we want an American car.

 

[DenOfThievz]

RIP Chrysler.
Face it - two things every US automaker just cannot conceivably overcome:

1- Perception by a large population of Americans that there is a MAJOR superiority of quality with imports

2 - Labor Unions

While corporations need to be concerned with ALL aspects of business (labor, product and investors), big unions ultimately could care less what happens to the product or the company - its all about labor.

Ford won't be far behind in the death by perception/labor law. GM may survive for MY lifetime, but I doubt they'll be around for my grandkids.

Americans just like their imports and love to bash American corporations.
(I know that isn't true of all, but those that don't fit that category are largely becoming a minority)

 

[Muzzy]

It means lean times for all involved. The whole concept will be reduce as much as possible, save money and get ready to spin it off for a huge profit.

Thank God Magna didn't get it. That was bad thinking on Magna's part.

Slice it, dice it and sell it off.

These new owners are not in it to be in the automotive industry, they are in it to make a alot of money and continue spending week-ends in the Hamptons. These guys don't drive Chryslers. It is all about money!

I do not agree. This is a good deal for Chrysler. Three members of my family have retired from Chrysler with over 100 years of combined service. Daimler has been siphoning profits from Chrysler group since day one of the so called “mergerâ€￾. There have been only a few positives that came out of the deal (return of the rear wheel drive platforms, improved auto trans technology). Right after the merger happened, Chrysler bought larger numbers of brand new Freightliner trucks to replace a fleet that wasn’t very old. This was a move by Daimler to make Freightliner look profitable. There are many other examples of Daimler shifting money around to make Mercedes look good while Chrysler was being sucked dry. If you look at the sales numbers for the past six years, only last year did Chrysler do poorly (so did Ford and GM), but they still maintained their market share.

With this new deal Chrysler will be a stand alone company again. Not only that, but it will be a private company. Cerberus is a huge holding company. They have better than $60 billion a year in revenue with their combined subsidiaries which include FILA, Alamo, GMAC, and Air Canada. Maybe I am being an optimist about this, but all the info I have read on it so far points it being a positive outcome for Chrysler. There will be a huge cash reserve behind Chrysler to assist its Return To Profitability strategy.

The statement released also makes note that healthcare benefits and pensions will be unaffected. If anyone else has more info, please chime in.

-Muzzy

 

[Manic]

I am not too sure what to say about the deal. I feel a bit better now with Wolfgang Bernhard being part of the Cerberus group.

He was a major part of the initial rebuilding of the Chrysler group before he started stepping on the toes of Daimler execs and with that out of the way he can put his vision of Chrysler into full advancement.

Will


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Wolfgang Bernhard will not be a part of the Chrysler deal. Yet!
Posted May 14th 2007 12:29PM by Sam Abuelsamid
Filed under: Hirings/Firings, Chrysler

Now that the new Chrysler Corp. has been created by Daimler AG selling a majority stake in the company to Cerberus Capital Management, the next question is who is in charge? In recent weeks, former Chrysler group chief operating officer Wolfgang Bernhard has been quite conspicuous in the halls of Chrysler's Auburn Hills headquarters. However, the announcement made clear that the current Chrysler management team led by Tom LaSorda would stay in place, at least for now.

Bernhard will not be part of Chrysler management but will stay with Cerberus. Almost certainly when Bernhard left Volkswagen early this year, his separation agreement included a no-compete clause probably for two years which prohibits him from taking a direct role at Chrysler. What we will probably see is Bernhard acting as a liaison between the equity firm and the carmaker. That probably means LaSorda has about eighteen months to turn things around before Wolfgang steps back in.

 

[kalani]

I dont know what to expect from this but im just glad GM didnt get their hands on it!!

 

[Django]

............Very interesting...............

D