Sale of Chrysler?
#1
11-14-2006, 06:26 AM
Join Date: May 2005
Location: Tallahassee, Florida but missing Fort Myers
Posts: 903
Sale of Chrysler?
FRANKFURT, Germany (AP) β DaimlerChrysler (DCX) said Wednesday it is reviewing all aspects of its U.S.-based operations, including management and strategy, after a $1.5 billion operating loss at the Chrysler division dragged down the automaker's third-quarter profit 37%.
DaimlerChrysler's overall profit beat analysts' estimates, but the tough talk about examining the Chrysler Group led analysts to question whether the division could even be sold off.
Chrysler executives said they are "in no way satisfied" with the third-quarter results but said it is far too early to draw any conclusions.
DaimlerChrysler earned 541 million euros ($686 million) in the July-September period, down from a profit of 855 million euros a year earlier. Analysts polled by Dow Jones Newswires had expected a loss of 47 million euros ($58.9 million).
Overall, DaimlerChrysler's operating profit fell 51% to 892 million euros ($1.13 billion), but beat analysts' forecast of 549 million euros ($688.5 million).
While results lagged at Chrysler β hampered, like its U.S. rivals, by difficult market conditions β the German-American automaker saw strength in its Mercedes Car Group, where operating profit more than doubled to 991 million euros ($1.3 billion).
Overall sales fell 8% to 35.2 billion euros ($44.6 billion), hurt by a 26% decline at Chrysler to 9.5 billion euros ($12 billion).
The 1.16 billion euro operating loss at Chrysler compared with an operating profit of 310 million euros the year before and "was primarily the result of a decrease in worldwide factory unit sales, an unfavorable shift in product and market mix, and negative net pricing," DaimlerChrysler said in a statement.
Chrysler CEO Tom LaSorda said the company is "in no way satisfied" with the third-quarter results.
"We have taken dramatic steps to reduce production and shipments to address the inventory situation in the U.S. and we continue to work to find new ways to eliminate waste, lower our costs and improve quality," he said in a statement.
Chief Financial Officer Bodo Uebber said seven teams comprised of executives from Chrysler and other parts of DaimlerChrysler would analyze and examine the division's business practices and review "all aspects of the value chain."
The teams will review Chrysler Group's product strategy, portfolio management, capital management, fixed cost management, structural changes, manufacturing, material costs, revenue management and quality. No timetable was released.
"Our aim must be to improve the earnings situation at the Chrysler Group as quickly, as comprehensively and sustainably as possible," Uebber said.
He offered no direct reply when asked during a conference call if the company is considering selling Chrysler or bringing in a partner.
"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.
The company warned last month of a large loss at Chrysler, but said it would return to profit in the fourth quarter.
"Though a number of new models β the Wrangler, Compass, Aspen, Nitro β are scheduled for imminent launch, Chrysler faces an uphill turnaround task," said Stephen Cheetham, a European auto analyst at Sanford C. Bernstein in London.
Chrysler, like its American rivals, has suffered as high oil prices lead buyers to shift toward smaller cars, away from sport-utility vehicles and other models that use more fuel.
Last month, DaimlerChrysler lowered its 2006 operating profit forecast to around 5 billion euros ($6.3 billion) from its previous forecast of 6 billion euros ($7.5 billion), citing problems at Chrysler.
Looking ahead, the company said it expected a slight decrease in global demand for automobiles in the fourth quarter, but said its overall sales growth for the year should be around 3%, down from the 4% it saw last year.
Because of lighter demand in Japan and the U.S., DaimlerChrysler said it expected its total vehicle sales for 2006 to be less than the 4.8 million it sold in 2005.
DaimlerChrysler's overall profit beat analysts' estimates, but the tough talk about examining the Chrysler Group led analysts to question whether the division could even be sold off.
Chrysler executives said they are "in no way satisfied" with the third-quarter results but said it is far too early to draw any conclusions.
DaimlerChrysler earned 541 million euros ($686 million) in the July-September period, down from a profit of 855 million euros a year earlier. Analysts polled by Dow Jones Newswires had expected a loss of 47 million euros ($58.9 million).
Overall, DaimlerChrysler's operating profit fell 51% to 892 million euros ($1.13 billion), but beat analysts' forecast of 549 million euros ($688.5 million).
While results lagged at Chrysler β hampered, like its U.S. rivals, by difficult market conditions β the German-American automaker saw strength in its Mercedes Car Group, where operating profit more than doubled to 991 million euros ($1.3 billion).
Overall sales fell 8% to 35.2 billion euros ($44.6 billion), hurt by a 26% decline at Chrysler to 9.5 billion euros ($12 billion).
The 1.16 billion euro operating loss at Chrysler compared with an operating profit of 310 million euros the year before and "was primarily the result of a decrease in worldwide factory unit sales, an unfavorable shift in product and market mix, and negative net pricing," DaimlerChrysler said in a statement.
Chrysler CEO Tom LaSorda said the company is "in no way satisfied" with the third-quarter results.
"We have taken dramatic steps to reduce production and shipments to address the inventory situation in the U.S. and we continue to work to find new ways to eliminate waste, lower our costs and improve quality," he said in a statement.
Chief Financial Officer Bodo Uebber said seven teams comprised of executives from Chrysler and other parts of DaimlerChrysler would analyze and examine the division's business practices and review "all aspects of the value chain."
The teams will review Chrysler Group's product strategy, portfolio management, capital management, fixed cost management, structural changes, manufacturing, material costs, revenue management and quality. No timetable was released.
"Our aim must be to improve the earnings situation at the Chrysler Group as quickly, as comprehensively and sustainably as possible," Uebber said.
He offered no direct reply when asked during a conference call if the company is considering selling Chrysler or bringing in a partner.
"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.
The company warned last month of a large loss at Chrysler, but said it would return to profit in the fourth quarter.
"Though a number of new models β the Wrangler, Compass, Aspen, Nitro β are scheduled for imminent launch, Chrysler faces an uphill turnaround task," said Stephen Cheetham, a European auto analyst at Sanford C. Bernstein in London.
Chrysler, like its American rivals, has suffered as high oil prices lead buyers to shift toward smaller cars, away from sport-utility vehicles and other models that use more fuel.
Last month, DaimlerChrysler lowered its 2006 operating profit forecast to around 5 billion euros ($6.3 billion) from its previous forecast of 6 billion euros ($7.5 billion), citing problems at Chrysler.
Looking ahead, the company said it expected a slight decrease in global demand for automobiles in the fourth quarter, but said its overall sales growth for the year should be around 3%, down from the 4% it saw last year.
Because of lighter demand in Japan and the U.S., DaimlerChrysler said it expected its total vehicle sales for 2006 to be less than the 4.8 million it sold in 2005.
#2
11-15-2006, 12:15 PM
Join Date: May 2005
Location: Tallahassee, Florida but missing Fort Myers
Posts: 903
#4
04-08-2007, 11:19 AM
RE: Sale of Chrysler?
ORIGINAL: Dan7055
What would it mean if Daimler sold Chrysler? Would Chrysler just be on its own again? Or would Chrysler no longer exist at all?
What would it mean if Daimler sold Chrysler? Would Chrysler just be on its own again? Or would Chrysler no longer exist at all?
Daimler cannot sell Chrysler, owner of Chrysler will sell Chrysler.
#5
04-12-2007, 11:00 PM
RE: Sale of Chrysler?
Interesting too that their remains little news about the Dodge Challenger, just rumors of will be built in Canada. I noticed car mags don't reference it anymore, but still tout the Camaro which is an'09 release.
#7
05-14-2007, 03:38 PM
RE: Sale of Chrysler?
No rumor anymore, check this out...
05/14/2007 04:42 AM To Chrysler Group Employees and Contractors
cc
Subject Important Message
Dear Colleagues,
We are very pleased about the news today that DaimlerChrysler has signed a definitive agreement to sell Chrysler Group, including Chrysler Financial, to Cerberus Capital Management, L.P. I would like to take this opportunity to discuss this exciting news and what it means for the future of the Chrysler family.
We are confident that this transaction will create a stand-alone Chrysler that is financially stronger, with a winning combination of people, industry know-how, operational expertise and spirit of innovation that will accelerate the companyβs recovery and help us regain our position as a competitive industry leader.
As you know, DaimlerChrysler looked long and hard for the right partner for Chrysler in a competitive marketplace. We are confident that Cerberus is the right strategic buyer for Chrysler, with a long-term commitment to our growth and success. Cerberus has expressed great confidence in and respect for the people of Chrysler and our leadership team, and is committed to working constructively with both union leadership and Chryslerβs management team to help us realize our full potential.
As a private (non-public) company, we will be better positioned to concentrate on our long-term plan for recovery, rather than on short-term results. With the financial strength and additional operational expertise brought by our investment partner Cerberus, Chrysler will renew its focus on what has always made us special: the passion, creativity and commitment of our employees, suppliers and dealers to delivering exciting Chrysler, Jeep and Dodge vehicles and quality Mopar parts to our customers.
The finance arm β- DaimlerChrysler Financial Services Americas -β also is affected by this decision. The most important piece of information is that Chrysler Financial will continue to support us and our dealers. However, the framework for DCFS will change. The company will be split up into two legal entities with Chrysler Financial as one company and Mercedes-Benz and DaimlerChrysler Truck Financial as another.
Our future success will be supported by our continued relationship with Daimler. We will continue to work together on technologies to bring even better products to our customers. In particular, we will continue to collaborate on technologies for clean diesel engines, two-mode hybrids, fuel cells and other alternative powertrains that are especially important in this climate of rising consumer demand for more fuel-efficient vehicles. Other ongoing joint projects with Mercedes-Benz also will continue.
Attached to this message is a letter from Dieter Zetsche that I encourage you all to read. He remains a passionate supporter of Chrysler, and he truly believes -β as I do β- that the new company structure will offer us even greater prospects for success.
For those of you who may not be familiar with Cerberus, it is one of the leading private investment firms in the world, with approximately $23.5 billion under management in funds and accounts. Currently, Cerberus has significant investments in more than 50 companies that, in aggregate, generate more than $60 billion in annual revenues worldwide, including Air Canada and GMAC. Cerberus is highly respected for its long-term investment horizon and focus on value creation. In addition, Cerberus has a team of experienced operational professionals that includes industry veterans with management backgrounds in the automotive industry.
You should know that there are no new plans β- other than those previously announced β- to reduce headcount. There are no additional job cuts planned in connection with the transaction announced today. This announcement also will not impact the provisions of the early retirement and buyout packages previously announced.
Additionally, we do not foresee any impact on current union contracts; all of the collective bargaining agreements remain in place, and the upcoming negotiations will take place as scheduled. Cerberus has worked together with unions in the past, and recognizes the important role they play for Chrysler.
The transaction is expected to close this summer. In the meantime, we will continue to operate under the vision established by the Recovery and Transformation Plan (RTP), which will return us to profitability in 2008 and will deliver 2.5 percent return on sales by 2009. There are several forward-looking elements in the RTP that take into account the realities needed to succeed in the global marketplace. We must grow our brands with strong, customer-focused products. We must defend our areas of strength in the North American markets, while growing internationally. And we must continue to build with alliances, partnerships and innovative approaches to our business challenges.
Continued in next message.
05/14/2007 04:42 AM To Chrysler Group Employees and Contractors
cc
Subject Important Message
Dear Colleagues,
We are very pleased about the news today that DaimlerChrysler has signed a definitive agreement to sell Chrysler Group, including Chrysler Financial, to Cerberus Capital Management, L.P. I would like to take this opportunity to discuss this exciting news and what it means for the future of the Chrysler family.
We are confident that this transaction will create a stand-alone Chrysler that is financially stronger, with a winning combination of people, industry know-how, operational expertise and spirit of innovation that will accelerate the companyβs recovery and help us regain our position as a competitive industry leader.
As you know, DaimlerChrysler looked long and hard for the right partner for Chrysler in a competitive marketplace. We are confident that Cerberus is the right strategic buyer for Chrysler, with a long-term commitment to our growth and success. Cerberus has expressed great confidence in and respect for the people of Chrysler and our leadership team, and is committed to working constructively with both union leadership and Chryslerβs management team to help us realize our full potential.
As a private (non-public) company, we will be better positioned to concentrate on our long-term plan for recovery, rather than on short-term results. With the financial strength and additional operational expertise brought by our investment partner Cerberus, Chrysler will renew its focus on what has always made us special: the passion, creativity and commitment of our employees, suppliers and dealers to delivering exciting Chrysler, Jeep and Dodge vehicles and quality Mopar parts to our customers.
The finance arm β- DaimlerChrysler Financial Services Americas -β also is affected by this decision. The most important piece of information is that Chrysler Financial will continue to support us and our dealers. However, the framework for DCFS will change. The company will be split up into two legal entities with Chrysler Financial as one company and Mercedes-Benz and DaimlerChrysler Truck Financial as another.
Our future success will be supported by our continued relationship with Daimler. We will continue to work together on technologies to bring even better products to our customers. In particular, we will continue to collaborate on technologies for clean diesel engines, two-mode hybrids, fuel cells and other alternative powertrains that are especially important in this climate of rising consumer demand for more fuel-efficient vehicles. Other ongoing joint projects with Mercedes-Benz also will continue.
Attached to this message is a letter from Dieter Zetsche that I encourage you all to read. He remains a passionate supporter of Chrysler, and he truly believes -β as I do β- that the new company structure will offer us even greater prospects for success.
For those of you who may not be familiar with Cerberus, it is one of the leading private investment firms in the world, with approximately $23.5 billion under management in funds and accounts. Currently, Cerberus has significant investments in more than 50 companies that, in aggregate, generate more than $60 billion in annual revenues worldwide, including Air Canada and GMAC. Cerberus is highly respected for its long-term investment horizon and focus on value creation. In addition, Cerberus has a team of experienced operational professionals that includes industry veterans with management backgrounds in the automotive industry.
You should know that there are no new plans β- other than those previously announced β- to reduce headcount. There are no additional job cuts planned in connection with the transaction announced today. This announcement also will not impact the provisions of the early retirement and buyout packages previously announced.
Additionally, we do not foresee any impact on current union contracts; all of the collective bargaining agreements remain in place, and the upcoming negotiations will take place as scheduled. Cerberus has worked together with unions in the past, and recognizes the important role they play for Chrysler.
The transaction is expected to close this summer. In the meantime, we will continue to operate under the vision established by the Recovery and Transformation Plan (RTP), which will return us to profitability in 2008 and will deliver 2.5 percent return on sales by 2009. There are several forward-looking elements in the RTP that take into account the realities needed to succeed in the global marketplace. We must grow our brands with strong, customer-focused products. We must defend our areas of strength in the North American markets, while growing internationally. And we must continue to build with alliances, partnerships and innovative approaches to our business challenges.
Continued in next message.
#8
05-14-2007, 03:39 PM
RE: Sale of Chrysler?
Continued:
Also attached to this message is a Q&A document with answers to other questions you may have today. In addition, you should expect frequent communication from the leadership team as this process moves forward.
As a stand-alone company, with strong backing from Cerberus, we must demonstrate once and for all that we can win in this global marketplace. It is ours to win. And we have it in our DNA to do just that.
On a personal level, as a fourth-generation Chrysler employee, this is a dream come true for me to be given an opportunity to work with you to restore Chrysler back to greatness. It will take hard work, but I know that I can count on you to do whatever it takes to get the job done.
Also attached to this message is a Q&A document with answers to other questions you may have today. In addition, you should expect frequent communication from the leadership team as this process moves forward.
As a stand-alone company, with strong backing from Cerberus, we must demonstrate once and for all that we can win in this global marketplace. It is ours to win. And we have it in our DNA to do just that.
On a personal level, as a fourth-generation Chrysler employee, this is a dream come true for me to be given an opportunity to work with you to restore Chrysler back to greatness. It will take hard work, but I know that I can count on you to do whatever it takes to get the job done.
#10
05-14-2007, 05:39 PM
RE: Sale of Chrysler?
Well, Daimler-Benz paid $36 billion to get Chrysler back in 1998 and now they've sold it for $7.5 billion... wonder if someone will get the sack in Stuttgart for that blunder.
I'm not sure if this is really good news for Chrysler... Cerberus is noted for buying sick companies and then turning them around through ruthless cost-cutting, so despite the cheery stuff about no new plans to reduce headcount I think that'll be inevitable.
Also, Cerberus owns GMAC and apparently the expectation is that Chrysler Financial will be merged with GMAC (another merger of "equals"?) so that a lot of "synergy" can be achieved (read as jobs eliminated).
Anyway, lets see what happens... Chrysler has just come up with some really interesting designs lately, starting with the Pacifica, the new 300, the Jeep Patriot/Compass, the new minivans... it'll be a shame if they can't continue making good cars.
Thanks and regards,
Jagan.
I'm not sure if this is really good news for Chrysler... Cerberus is noted for buying sick companies and then turning them around through ruthless cost-cutting, so despite the cheery stuff about no new plans to reduce headcount I think that'll be inevitable.
Also, Cerberus owns GMAC and apparently the expectation is that Chrysler Financial will be merged with GMAC (another merger of "equals"?) so that a lot of "synergy" can be achieved (read as jobs eliminated).
Anyway, lets see what happens... Chrysler has just come up with some really interesting designs lately, starting with the Pacifica, the new 300, the Jeep Patriot/Compass, the new minivans... it'll be a shame if they can't continue making good cars.
Thanks and regards,
Jagan.