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| cmitch Expert Date registered: Apr 2006 Location: Ala-Tenn Vehicle(s): 2002 ML320, 2005 S430 4Matic, 2010 F150 Super Crew Posts: 3412  | ||
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| RE: DaimlerChrysler CFO won't rule out spinoff of U.S. Chrysler NY Times Article...!! ___________________ 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 months. 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 Fiat. 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. Last year, in fact, it was Chrysler that propped up Mercedes as it stumbled amid quality problems that threatened to tarnish the image of its expensive luxury cars. Now it is Chrysler that has acknowledged it needs a restructuring, its second in six years. Its Detroit business model, based on mass-market sales of sport utility vehicles and pickup trucks, has not shifted quickly enough to keep it competitive as gas prices have risen. “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 speculation.” 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. Indeed, Chrysler won buyers two years ago with its 300C sedan, with a transmission and other technology from Mercedes. The 300C seemed like a promise of a new, more nimble company. But Chrysler continued to rely heavily on S.U.V.s and pickups for nearly three-quarters of its sales, the highest percentage in the industry, leaving it unprotected earlier this year when $3 a gallon gas prices stalled those sales and sent buyers to more fuel-efficient vehicles. As a result, Chrysler’s revenue plummeted by 23 percent along with its sales in the third quarter. 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 breakup. The original agreement between Daimler-Benz and Chrysler did not set forth terms for a split — a reflection of the confidence Mr. Schrempp and Chrysler’s chief executive at the time, Robert J. Eaton, felt about the merger’s long-term success. But even the faintest possibility of a division is likely to put more pressure on Chrysler’s employees, including its union members. Chrysler executives were upset earlier this fall when the U.A.W. broke off talks on health care concessions similar to those granted at General Motors and at Ford Motor. At the time, the union’s president, Ron Gettelfinger, said an analysis by the U.A.W.’s financial adviser showed Chrysler was not in dire enough shape to require the givebacks. Now, the bad news could spur both sides back to the table — and create even more turmoil for residents of the Motor City, who have already been battered by an unrelenting deluge of dire developments this year. “How are people supposed to work when there’s all this craziness going on?” Mr. Pinelli asked. “It’s so unsettling when you don’t know what’s coming next.” Nick Bunkley contributed reporting. (26chrysler.jpg) Attachments ----------------  26chrysler.jpg (33KB - 2 downloads) | ||
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| RE: DaimlerChrysler CFO won't rule out spinoff of U.S. Chrysler Oh please let it happen. (I can dream, can't I?) Then they'll merge with kia or something...  | ||
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