Renault, Chinese Interested in Snapping up Chrysler When Daimler Unloads It

Discussion in 'General Motoring' started by slas, Oct 26, 2006.

  1. slas

    slas Guest


    DETROIT, Oct. 25 - 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

    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

    But DaimlerChrysler, meant to be a merger of equals between Germany's
    Daimler-Benz and Chrysler of the United States, has instead proved to
    be an automotive seesaw.

    Rarely in the last eight years have both Chrysler and Mercedes,
    Daimler's German luxury brand, been on the upswing at the same time.

    "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

    Officials at Chrysler maintained later Wednesday that the company was
    not in danger of being abandoned by the German parent that had wooed it
    so forcefully almost a decade ago. Indeed, DaimlerChrysler's chief
    executive, Dieter Zetsche, who ran Chrysler until a year ago, has
    emphasized his intent to fix Chrysler, not dump it.

    But a potential suitor exists: Carlos Ghosn, the chief executive of
    Renault and Nissan who tried unsuccessfully this summer to explore a
    possible alliance with G.M., has made no secret of his desire to add a
    North American partner to his union.

    Beyond Mr. Ghosn, the most likely candidate might be a company from
    China, whose automakers are eager to expand into North America, said
    Ron Pinelli, an industry analyst with Autodata of Woodcliff Lake, N.J.

    But "all the Chinese would want would be the dealers and the brand
    names - they don't want the factories or the employees," he said.

    Chrysler's situation now is in sharp contrast to 1998, when it was an
    auto industry darling, known for taking risks with styling and earning
    some of the biggest profits in the industry on vehicles like the Jeep
    Grand Cherokee and the Dodge Ram pickup.

    The merger was the brainchild of a former Daimler-Benz chief executive,
    Jürgen Schrempp, who envisioned a global company that could share
    purchasing, manufacturing and development while keeping separate
    identities for both Chrysler and Mercedes.

    The deal, however, has never paid off on the scale that Mr. Zetsche
    imagined, and indeed, Chrysler has bounced back and forth between its
    traditional identity as the third-biggest American player and its goal
    of joining Mercedes among a small group of foreign brands with clear
    identities and buyer loyalty.

    The company, which had insisted its fortunes would improve during the
    second half of the year, instead surprised analysts a few weeks ago by
    disclosing it expected to lose $1.5 billion.

    Earlier this week, Chrysler acknowledged that it has kept as many as
    100,000 vehicles in its order bank, a separate supply of cars that have
    not been assigned to dealers and are not included in its inventory
    figures, which are already high by industry standards.

    The company's problems led it to create what it is calling "Project
    Refocus," an effort to re-examine every aspect of the way Chrysler
    does business, from manufacturing to purchasing and its overhead costs.

    The company is striving to cut the equivalent of $1,000 out of the cost
    of every vehicle, a difficult task given that Chrysler is introducing
    eight models this fall. It is much easier for companies to cut costs
    before new models are introduced.

    Another difficult task would be setting a value on Chrysler as a
    separate company, as well as determining the mechanics of a possible
    slas, Oct 26, 2006
  2. slas

    Joe Guest


    DETROIT, Oct. 25 - DaimlerChrysler without Chrysler might not be that
    farfetched an idea.

    blah blah blah.

    -->Rarely in the last eight years have both Chrysler and Mercedes,
    -->Daimler's German luxury brand, been on the upswing at the same time.

    That's the first thing in a long time in the auto industry that looks like a
    strategy. That's the perfect reason for staying together. I did not know
    it was working out so well for them.
    Joe, Oct 27, 2006
  3. slas

    DeserTBoB Guest

    One's been supporting the other for awhile now, and the roles
    reverse...why dump the Chrysler operation?

    It's funny to see people exhibiting such angst about the Daimler
    takeover of Chrysler. When Iacocca was running things, he dreamt of
    forming a "Global Motors" model, where he'd have a troika with one
    strong Euro builder and one emerging Japanese builder. He got close,
    getting into merger talks with VW in the early '80s, but screwed up by
    picking Mitsubishi as the Japanese component. After VW saw the
    books, they ran like hell, probably at the behest of the German
    bankers. Remember, even this late, the US bankers were still trying
    to force Chrysler Corporation to go into bankruptcy, and Iacocca told
    them where to stick it. Reason: while everyone else would get
    screwed...customers, workers, suppliers, taxpayers...the banks
    would've made out like bandits...which they are, anyway.
    DeserTBoB, Oct 27, 2006
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