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Daimler sells Chrysler

3K views 37 replies 19 participants last post by  DarkOne 
#1 ·
... and the buyer is Cerberus, a financial investor. They pay Euro 5.5 billion for 80.1 percent of Chrysler, Daimler keeps the rest.

So the DaimlerChrysler AG will be the Daimler AG soon once again - the Chrysler episode only costed them about 30 billion...
 
#3 ·
Some more details, Daimler will only make a "profit" of 500m Euro, 5bn will be a capital contribution for Chrysler. Everyone seems to be satisfied with this deal, shows that what they have done some years ago must have been the worst auto business decision that was ever made.

Daimler bought Chrysler for 36bn US$, their overall loss with Chrysler will be even higher.
 
#5 · (Edited)
If Germany wanted nuclear capability... They would have it. They do not need it.

They have far more real capability with selling BMW's and Mercedes to every corner of the globe, than being able to theoretically atomise every corner of the globe.

It's not a choice between 'naff' car comapnies and nuclear weapons. It's a choice between real power and imaginary power. A choice the Germans have since the war been able to make properly.
 
#6 ·
:URGOD: Blindingly good post there smosquito Sums things up very neatly.

And not just BMWs and Mercedes, it's power stations, chemical refineries, heavy duty stuff like railways...a shame they haven't exported Soziale Marktwirtschaft to us in the UK.

Much better to spend the 20 billion (and the rest) on things the country really needs instead of Trident submarines. We could rebuild our manufacturing industry, mag-lev trains, a space programme...
 
#16 ·
Something I find interesting is that the Cerberus, the Private equity group buying the 80% of Chrysler, led the consortium that bought a majority stake in GMAC (General Motors Acceptances Corp. iirc), GM's financial division...maybe they'll soon become General Motors & Chrysler Acceptances Corp... GM will be thrilled! LOL!
 
#18 ·
Well I just had a look at the Jeep website. The commander kicks off at a shade under 32 grand. They are also the most unreliable make of car you can buy. I honestly think at times there should be some sort of fashion Police ,to protect the public from poor taste.

I think it's putting it mildly to describe it as a rather 'unattractive' car. In fact it looks like it's been designed by a bunch of marines for use in a war zone. In fact ,and perhaps not for the first time I'm going to make a sweeping statement and describe it as 'rubbish'.

There are loads of good cars from America ,but I'm afraid the Jeep commander sure aint one of them!
 

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#19 ·
There are loads of good cars from America ,but I'm afraid the Jeep commander sure aint one of them!
Hmmm - beyond exotica and a few Chryslers (300C, PT Cruiser and Voyager) can you really think of any that have succeeded in the UK? And of thsoe that have are any of the even near best in class?

Caddy get trounced every time they put a foot in the market and there is a reason Ford US is struggling and Ford Europe is doing fine...
 
#25 ·
It seems to be that Americans buy on price....look at the food over there. From what I saw on my trip ouot ten years ago you paid next to nothing for huge portions of something that was hardly worth eating. They mix up cheapness with value
Well I've just returned from a weeks business trip to the USA, and I travelled in a hired Dodge (Chrysler) which was good value for money compared to its USA price level.
I disagree that the Americans mix cheapness with value, they don't. In actual fact their market is rather better than ours in delivering value for money when it come to automobiles, and come to think about it vitually everything else.

A US colleague had just taken delivery of a new Chrysler Town and Country - (that's a Voyager to you and me). The price - under $28000 - £14000 at todays exchange rates. Over here the nearest equivalent model is £25000.

That's the effect of living in "treasure island" UK, and its why I chose to buy my new 80 gb ipod over there and not in the UK.
And as for the cost of hotel rooms, well let's not even go there.........less than half the price in the USA for an equivalent quality room......we truely are living in rip off Britian.
 
#26 ·
That's the effect of living in "treasure island" UK, and its why I chose to buy my new 80 gb ipod over there and not in the UK.
And as for the cost of hotel rooms, well let's not even go there.........less than half the price in the USA for an equivalent quality room......we truely are living in rip off Britian.
In many things I agree but when it comes to things like hotels there is good reason why the UK is more expensive: it costs a lot to buy or build a hotel.

Try getting a good hotel in Manhattan on a popular day for much less than $500-$600 a night (plus tax, plus tip etc.).

That said, even in more rural areas, a lot of the chains such as Travellodge, Hampton Inn etc. are now in the $80-$150 price bracket which isn't a lot less than Premier Travel Lodges etc. of the UK. Accomodation is one thing I think has gone up significantly in the US recently.
 
#28 ·
Chrysler sold to Cerberus
PRIVATE EQUITY firm, Cerberus Capital Management, has agreed to buy 80.1% of Chrysler Group.

The private equity firm is paying $7.4bn for the stake and will take-on Chrysler's pension and health-care liabilities.

"We are aware that Chrysler faces significant challenges, but we are confident that they can and will be overcome," said John Snow, chairman of Cerberus Capital Management.

"Cerberus believes in the inherent strength of U.S. manufacturing and of the U.S. auto industry. Most importantly, we believe in Chrysler," he said.

Shares in Daimler Chrysler rose 5.4% in Frankfurt on news of the deal today.

The news was welcomed by unions.

"The transaction with Cerberus is in the best interests of our UAW (United Auto Workers Union) members, the Chrysler Group and Daimler," said president, Ron Gettelfinger.

" We are pleased that this decision has been made, because our members and the management can now focus entirely on the development and manufacture of quality products for the future of the Chrysler Group," he added.

Cerberus already owns 51% of GMAC, the financing unit of General Motors Corp. (GM).

Of the total of $7.4bn, $5bn is going into the industrial business and $1.05bn into the financial-services business. Daimler Chrysler will receive the balance of $1.35bn.

Daimler Chrysler retains 19.9%

Daimler Chrysler will also grant a loan of $400m to Chrysler, and make an $878m prepayment compensation due to Cerberus taking-on the pension scheme.

The US Chrysler firm is to continue co-operating with Daimler's Mercedes Car Group on projects, such as developing conventional and alternative drive systems, purchasing, and financial services outside of North America.

Daimler Chrysler will retain a 19.9% stake in the American manufacturer. "We very much look forward to our continued cooperation as business partners, as we want to continue to reap the mutual benefits of working together," said Daimler Chrysler CEO Dieter Zetsche. "That's one of the reasons why we're retaining an equity position in Chrysler."

* In 1998, Daimler paid $35bn for the Chrysler unit
SOURCE: Autowired
 
#29 · (Edited)
Worth mentioning is the fact that, on this side of the pond, Mercedes is getting lambasted over accusations that they effectively raided what was worth keeping from the Chrysler corporation and are now dumping the rest. I found this interesting since BMW has been accused of the same regarding MG Rover. I cannot say that I know enough about either situation to support such notions, but it does make one wonder if this is possibly becoming something of a trend among German car companies.

It is also interesting that, despite early rumours, nothing came of talks between DCX and Ford regarding Jeep. I still retain some in the know friends from my days in the auto community and I heard that 1: Chrysler was absolutely up for sale and 2: both a Chinese concern and Ford were in talks with DCX over purchasing all or portions of DCX a solid three weeks before it even leaked to the press. Unfortunately this has simply developed into another instance of the favored companies to make a move proving too timid to take the plunge in the end. I would have liked to have seen Ford bring Jeep into the fold. But with Ford's existing monetary problems I can certainly understand why they might have backed away from such a deal.
 
#30 ·
Worth mentioning is the fact that, on this side of the pond, Mercedes is getting lambasted over accusations that they effectively raided what was worth keeping from the Chrysler corporation and are now dumping the rest. I found this interesting since BMW has been accused of the same regarding MG Rover. I cannot say that I know enough about either situation to support such notions, but it does make one wonder if this is possibly becoming something of a trend among German car companies.
It's certainly been suggested even over here in the UK that Daimler-Benz only bought Chrysler for the aerospace parts of the business - now they are trying to dispose of various parts of their aerospace and defence businesses like Airbus in Europe too.
 
#32 ·
It's funny really, I would consider a Chrysler in a way I would never consider a Mercedes. Mercedes just failed to make a profitable difference at Chrysler just like another south German manufacturer did with another attractive marque.

I wonder if they are calling themselves Daimler AG so we won't think they hog the middle lane on motorways and turn left out of right turn lanes? or so we'll think they have some connection with a manufacturer of IMHO desirable cars? ;)

Mind you, Chrysler has been bought by Cerberus. Isn't that a blind dog?

:getcoat:
 
#34 ·
Personally I think it will be just as interesting to see what Daimler does next. I keep wondering if Daimler and BMW will both make a mad scramble to make Ford an offer they can not refuse for PAG. Land Rover, Jag and Volvo would all fit neatly into the Daimler business. Daimler are useless at making 4x4's but Land Rover would get them right into the Premium SUV market. Jaguar wouldn't conflict with Mercedes as Jag looks set to pursue cars which are less limo/sportsar and more sportscar/limo. Volvo would be perfect for both BMW and Mercedes as a down market premium brand.

Ford is in a mess and I just wonder if a sizeable bid from either Daimler or BMW would be persuasive?
 
#35 ·
Lord Minty said:
It's certainly been suggested even over here in the UK that Daimler-Benz only bought Chrysler for the aerospace parts of the business...
How interesting... just bad that there were no aerospace business parts. But such a minor problem should not stop the usual conspiracy theories.


The combination of Daimler and Chrysler has never worked. The Mercedes technology was too expensive for Chrysler (and Daimler was not really keen to share it), and what Chrysler had to offer was simply not good enough for Mercedes. Some people might try to paint a different picture, but even with a magnifier it will be difficult to find anything Chrysler gave Daimler. A sign for that might be that Daimler will give away all Chrysler operations and brands.

It is interesting that Daimler-Benz has wasted incredible amounts of money during the last 20 years - and that they are still "rich". At all they burned about 100 billion Euro, the largest share with Chrysler (40 billion Euro seems to be a realistic number). 8 billion Euro for the tiny Smart business have not been cheap too.
 
#38 ·
jsaylor thank you for the informations, it's good to learn something new.


Still, with with high fuel prices and concerns/regulations over emissions, packaging could become more and more important.

And the big trucks, pick-ups only partially masked Japan's inroads/conquest in the car market (Camry, Accord, Civic, Altima), CUVs/premium CUVs and even minivans (except Chrysler).
The FWD Taurus/Sable was mighty combination till about 1995/6, but Ford lost it due to stupidly overfocusing on the trucks (at the expense of both FWD and RWD cars).
So my opinion is that Ford NA needs both FWD and RWD.

As for BMW, they were mostly a german/european with some american sales manufacturer, till not too long ago. One line-up for the world, a very flexible/higly customisable line-up, dependent on engines, body types and evel wheelbase lenght.
Diesels in Europe vs. petrols in the USA, hatchbacks and wagons vs. sedans, coupes and covertibles, X5 more prefered by americans to X3 more prefered by europeans, custom longwheel base 5er for China only and so on. The line up is created to permit tens of thousands of permutations.
 
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