Break-up or Sale Seems Inevitable for Chrysler

Date 2008/11/7 12:03:14 | Topic: Miscellaneous

There's blood in the water and everybody knows it. The break-up/bailout/sale rumors have continued unabated over the past few days - it seems all but confirmed that Chrysler is going to be transformed once again - into what is anyone's guess at this point. From the New York Times:
Chryslerís parent, buyout shop Cerberus Capital Management, and G.M. had agreed last month on the broad terms of a merger of Chryslerís loss-making auto operations and those of its crosstown rival but the deal is said to have foundered when the Bush administration reportedly rebuffed a request for some $10 billion to support it.

That setback has put the focus on winning support for a broader federal rescue package for G.M., Chrysler, Ford Motor and their suppliers that the industry argues would save jobs and protect benefits for retirees.

But Chrysler has been forced to consider a more drastic set of backup plans that could include selling off key business lines ó including Jeep, considered its most valuable brand. It may also outsource its finance and human resources, Reuters said.

As a step toward that hard-landing scenario, the automaker is moving to split up its replacement parts business based on brand so that its Chrysler, Jeep and Dodge operations could be completely separate, one source briefed on that plan said.

That could make it easier to sell off an individual brand.

What do you think is going to be the end result? Will the Jeep brand be spun off on its own? Will it become part of GM? Will Chrysler be able sell off enough of everything else to hang on?

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