Chrysler Sale Roundup

Date 2007/5/16 10:10:56 | Topic: Miscellaneous

From the Detriot Free Press:
Chrysler Group Chief Executive Officer Tom LaSorda -- confident and beaming on Tuesday, a day after it was announced that Chrysler is being sold to private equity titan Cerberus Capital Management -- provided insight into his vision for the immediate future of the Auburn Hills automaker as a stand-alone, privately held company.

He said no brands, such as Jeep, would be sold.

From Cincinnati Post:
Even though it is far leaner than when Daimler-Benz bought it nine years ago, some analysts wonder whether Chrysler has the allure, the cost structure and the size to compete against the likes of General Motors Corp. and Toyota Motor Corp.

Under Daimler's thumb, Chrysler has shrunk from 126,800 employees in 1998 to around 80,000 today, and it will get even smaller by 2009. The company sold 373,000 fewer vehicles globally last year than it did the year of the merger. Also unlike 1999, when it earned $5 billion, Chrysler is losing a lot of money.

From The Toledo Blade:
Analysts said it is unlikely that Cerberus Capital Management LP, the new owner of Chrysler Group, will spin off the Jeep brand separately from Dodge and Chrysler products in the foreseeable future.

They also said Cerberus isn't likely to make any changes at the new Global Engine Manufacturing Alliance engine plants in Dundee, Mich., which Chrysler partly owns.

Also from The Toledo Blade:
WHATEVER becomes of the Chrysler automotive group after its just-announced divorce from Daimler AG, Toledo and its workers should come out ahead for a fundamental reason: The Jeep brand is Chrysler's most valuable asset.

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From The Oakland Press:
LaSorda added that under Cerberus, Chrysler's strategy will be to strengthen its brands and protect its base in North America; look for partnerships that will help it expand overseas in places such as China, Southeast Asia and India, and maintain its work- ing relationship with Daimler AG, which will continue to own 19.9 percent of the new company, he said.

"The Chrysler, Dodge and Jeep brands will not be broken up,'' LaSorda said. "This should be great news for our dealers," LaSorda said of the deal.

"I also look forward to pursuing other partnerships that will be in the best interest of Chrysler. We aren't big in Asia and we have no presence in India and we would like to grow in those two areas.''

As Madden and other analysts see it, what Cerberus has its eye on isn't a remaking of Chrysler as the leading automaker of the 21st century, going toe-to-toe with Toyota for dominance of hybrid-vehicle sales.

Rather, Cerberus is looking to capitalize on its investment in a money-losing business by slashing costs, wringing additional concessions from autoworkers and generally sprucing up the balance sheet for whoever buys the company next.

"It doesn't bode well that the firm buying Chrysler is named after the three-headed dog that guarded the gates of hell," said Dan Becker, director the Sierra Club's global warming program.

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