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MiscellaneousChrysler Group on the Block?
Posted by mike on 2006/10/26 8:34:25 (1400) reads

Rumors are flying rampant in the news media about DaimlerChrysler possibly looking to sell Chrysler Group. The official line from DaimlerChrysler executives is that it is all speculation, but where there's smoke...? The New York Times is weighing in on the issue this morning:

DaimlerChrysler without Chrysler might not be that farfetched an idea.

Executives at Chrysler’s German parent on Wednesday refused to rule out the possibility that the Chrysler Group could be spun off or sold, after Chrysler announced that it lost $1.5 billion in the last three months.

Though there are no indications that such a spinoff is imminent, the possibility of such a sale is the latest sign of upheaval in the American auto industry, as the three Detroit companies struggle to return to profitability.

Such a move would potentially end the eight-year merger that shook the automobile industry when it was announced in 1998. That merger triggered other transnational arrangements, like the alliance between Renault and Nissan, and the now-defunct deal between General Motors and Fiat.

...snip...

“The goal is to create a strategy that assures the sustained profitability at Chrysler and DaimlerChrysler,” Bodo Übber, DaimlerChrysler’s chief financial officer, said during a conference call with industry analysts and journalists. He added: “We don’t exclude anything here.”

Mr. Übber continued, “We at first are doing the analysis, then we are talking about it, and we draw our conclusions.”

His careful language prompted immediate questions about whether Chrysler was up for sale. To one, Mr. Übber replied, “I can only repeat myself — first analysis, second measures, third is conclusion. That is what my statement is.”

He added: “Any speculation is what you are doing. I don’t do any speculation.”

What do you think about this possibility? Would this be good or bad for the Jeep brand?

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Poster Thread
skramwish
Posted: 2006/10/26 21:19  Updated: 2006/10/26 21:19
Just popping in
Joined: 2005/12/4
From:
Posts: 4
 Re: Chrysler Group on the Block?
Wouldn't it be ironic if Renault-Nissan bought the Chrysler group and Jeep was once again a product in the Renault line up? I think Renault would like to get back into the North American car market and after unsuccessful negotions with GM and Ford Chrysler may be their only viable option. Maybe we will see the Allaince, Encore and Cherokees back at Chrsyler dealerships.

Poster Thread
DMoore
Posted: 2006/10/26 11:16  Updated: 2006/10/26 11:16
Just popping in
Joined: 2006/10/10
From: NC
Posts: 10
 Re: Chrysler Group on the Block?
It certainly would not be good for Chrysler if Diamler sells it off. It may just be my perception, but it seems to me that Chrysler has really made strides since the merger. I am certainly no expert but it doesn't make much sense to me for Chrysler to be sold off. Daimler would be shutting itself out of a very large part of the automotive market. US auto makers have suffered greatly due to a perception of poor quality whether that be a fact or not. I do think that during the last 15 or so years that US auto makers have generally increased the reliability of their cars. I think the big problem is that US makers were riding the Truck and SUV wave to long while neglecting cars, especially cars that get decent gas mileage. I know some of the Japanese and European cars may be better but I think the biggest gap now is mostly perception. At least in the median price range.

Poster Thread
my97tj
Posted: 2006/10/26 12:04  Updated: 2006/10/26 12:04
Not too shy to talk
Joined: 2006/9/18
From: North Central Mass
Posts: 22
 Re: Chrysler Group on the Block?
For sale or not, the fact of the matter is the perception of poor quality, performance, and gas milage is really hurting the domestic passenger car market and dodge/chrysler is at the bottom of that list. I really can't think of anyone who would want the chrysler name. Who would buy it?

Poster Thread
CitizenArc
Posted: 2006/10/26 8:47  Updated: 2006/10/26 8:47
Not too shy to talk
Joined: 2006/5/18
From:
Posts: 29
 Re: Chrysler Group on the Block?
DCX says there are no plans to sell Chrysler

Detroit Free PressOctober 26, 2006

Email this Print this By MATT MOORE

Associated Press
FRANKFURT, Germany — DaimlerChrysler AG sought to quell rising speculation that it was considering selling its flagging Chrysler Group, reiterating that no such plan was in the offing.

“DaimlerChrysler reaffirms its previous statements made to the media that there are no plans to sell Chrysler Group,” said Hartmut Schick, a spokesman for the German-American automaker in a statement released early today.

The world’s fifth-largest automaker on Wednesday said it earned 541 million euros ($686 million) in the July-September period, compared with a profit of 855 million euros a year earlier. Sales fell 8 percent to euro35.2 billion ($44.6 billion) for the quarter from 38.1 billion euros a year ago.

Chrysler, which has been hampered by declining sales along with its other American rivals, posted an operating loss of 1.16 billion euros ($1.5 billion) in the quarter, compared with an operating profit of 310 million euros the year before.
Its sales fell 26% to 9.5 billion euros ($12 billion) from 12.8 billion euros.

Speculation mounted after Chief Financial Officer Bobo Uedder was asked in a conference call on Wednesday with analysts and reporters if Chrysler could be sold off.

“We have announced a thorough optimization program. We’re looking at all details of the value chain, we’re looking at structural changes,” he said. “What we need to safeguard is the sustainable profitability of the Chrysler Group and DaimlerChrysler.”

Asked if he could say that a sale of Chrysler had been ruled out, Uebber said he could not provide any more information.

“First we do our analysis, then we talk about measures, then we draw conclusions,” he said.

Schick said that the company issued the statement about not selling Chrysler because of speculation by the media, adding that “the company appropriately chose not to add to the speculation regarding this topic. However, the resulting coverage and comments made it clear that this ’not-for-sale’ statement needed to
be reaffirmed.”

Most analysts were pleased with DaimlerChrysler’s results, raising expectations
and their outlook for the automaker.

UBS lifted its price target to $56.61 from $50.32 and raised its earnings per share estimate to $4.09 from $3.07 for 2006.

Lehman Brothers said the results were good, but said they were driven by the Mercedes Car Group.

“Chrysler reported significant losses in line with guidance, and management commentary did not alleviate some of our concerns,” it said in an investment note.
HVB upped its rating on DaimlerChrysler stock to outperform from neutral while Merck Finck kept the company at a hold rating.
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