Daimler pays to dump Chrysler
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6th Gear
Joined: Aug 2002
Posts: 7,062
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From: Boston, MA
Daimler pays to dump Chrysler
I just saw this posted on cnn.money.com. I keep wondering when the U.S. auto industry will hit bottom, but investors just keep fleeing.
German automaker will end up actually paying $650 million to unload Chrysler to end its exposure to billions in ongoing losses, healthcare costs.
NEW YORK (CNNMoney.com) -- DaimlerChrysler moved to undo the most expensive and one of the least successful mergers in auto industry history Monday as it agreed to essentially pay to dump the money-losing Chrysler unit which it paid $37 billion for nine years ago.
DaimlerChrysler (Charts) announced it will sell an 80 percent stake in its U.S. brand to Cerberus Capital Management, a private equity investment firm that will pay $7.4 billion.
But the German automaker, which will be renamed simply Daimler, will not actually get most of the money that Cerberus is paying for the once proud automaker. Instead Cerberus will contribute $5 billion to the Chrysler auto operations it will now control, with just over another $1 billion going to Chrysler's finance arm.
While Daimler will receive the remaining $1.4 billion of Cerberus' capital contribution to the sale, Daimler expects to have to cover another $1.6 billion in Chrysler losses before the deal closes. So Daimler estimates that it will end up paying out about $650 million to close the deal, and that its earnings for 2007 will take a $4 billion to $5.4 billion profit hit due to charges related to the transaction.
What Daimler gains from the deal is closing the door on ongoing losses and liability for future health care costs, for Chrysler's unionized employees and retirees, estimated to be as high as $18 billion.
and it goes on...
German automaker will end up actually paying $650 million to unload Chrysler to end its exposure to billions in ongoing losses, healthcare costs.
NEW YORK (CNNMoney.com) -- DaimlerChrysler moved to undo the most expensive and one of the least successful mergers in auto industry history Monday as it agreed to essentially pay to dump the money-losing Chrysler unit which it paid $37 billion for nine years ago.
DaimlerChrysler (Charts) announced it will sell an 80 percent stake in its U.S. brand to Cerberus Capital Management, a private equity investment firm that will pay $7.4 billion.
But the German automaker, which will be renamed simply Daimler, will not actually get most of the money that Cerberus is paying for the once proud automaker. Instead Cerberus will contribute $5 billion to the Chrysler auto operations it will now control, with just over another $1 billion going to Chrysler's finance arm.
While Daimler will receive the remaining $1.4 billion of Cerberus' capital contribution to the sale, Daimler expects to have to cover another $1.6 billion in Chrysler losses before the deal closes. So Daimler estimates that it will end up paying out about $650 million to close the deal, and that its earnings for 2007 will take a $4 billion to $5.4 billion profit hit due to charges related to the transaction.
What Daimler gains from the deal is closing the door on ongoing losses and liability for future health care costs, for Chrysler's unionized employees and retirees, estimated to be as high as $18 billion.
and it goes on...
6th Gear
Joined: Mar 2007
Posts: 3,735
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From: South Orange County
I own a Dodge truck, Imo ,very comfy but drive train very breakable.I know people who work for them its been a battle from day one trying to merge these two companies,it was just a matter of time for a split.
6th Gear
Joined: Mar 2007
Posts: 1,995
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From: NC
The merger has only dragged Dailmer-Benz down since it happened and never made much sense. I hope chyrsler/dodge can turn it around but I have a feeling that dark days are ahead.
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6th Gear
Joined: Aug 2002
Posts: 7,062
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From: Boston, MA
Because he's a three-headed dog with a snake for a tail, scary enough to guard the gates of Hades! 
If my company was sold to Cerberus, I wouldn't show up the next morning. The only person that ever kicked Cerberus's *** was freaking Hercules. 
If my company was sold to Cerberus, I wouldn't show up the next morning. The only person that ever kicked Cerberus's *** was freaking Hercules.
Reverse Gear
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Sniffpetrol pretty much got it right last month
It is going to be interesting to see how this works out, I wonder if it will be anything like the 'purchase' of the Rover Group from BMW that lead to a gradual melt-down and asset stripping byt the Pheonix group ?
An American Mercedes buyer got more than he bargained for this week when he opened the boot of his brand new E-class to find someone had left Chrysler in it! **** Hamburglar of Arizona had just collected his shiny new car from Grunting Mercedes in Scottsdale and was on his way home when he heard a strange noise coming from the back of the car. "It sounded metallic, kinda like car production in under-capacity factories," Mr Hamburglar said later. "But it was overlaid with this whining sound, sorta like the noise you get when your pensions burden exceed your profit projections. So I stopped to take a look in the trunk and I simply could not believe my eyes. It was the entire Chrysler Corporation! Well, I turned right around and headed straight back to the Benz showroom so they could remove it before it started getting inadequate model development and low quality standards all over my trunk carpet".
Mr Hamburglar's misfortune might initially seem to be nothing more than a simple accident. In fact, there is growing evidence that it may be the latest in Mercedes-Benz's increasingly elaborate attempts to get rid of its American division. Two weeks before the ailing car maker turned up in a retiree's boot police in Michigan reported apprehending two men with "strong German accents" trying to throw several sizeable objects into the Detroit River. "Our officers noticed the men attempting to hoist a sack over bridge railings at approximately 1:30am," said a police sspokmean. "The sack appeared to contain two under-utilised automobile production facilities under heavy union control. In the open trunk of a nearby vehicle officers observed several other sacks, at least one possibly containing full size clay models of unattractive cars crudely saddled with generic styling cues of a retro nature, and 20,000 unsold Jeep Commanders. Upon being approached, the two men fled in their vehicle, openly sobbing".
Meanwhile, only this week staff at John F Kennedy airport prized open a suspicious left luggage locker to find it had been stuffed with financially crippling healthcare commitments and 30,000 unsold Jeep Commanders. Furthermore, at this week's New York motor show DaimlerChrysler boss Dr Dieter Zetsche was seen acting suspiciously around other car maker's stands before clearly abandoning a large briefcase near to the BMW display. When the case was returned to him, Dr Zetsche initially tried to deny all knowledge that it was his, a plee he swiftly retracted when the briefcase was opened and found to contain woeful inefficiency and a failure to anticipate trends towards smaller vehicles in the US and global non-premium markets.
"All of this means nothing," said a DaimlerChrysler pskoesman later. "We are talking to a number of parties interesting in Chrysler and there is no suggestion that we literally can't give it away
Mr Hamburglar's misfortune might initially seem to be nothing more than a simple accident. In fact, there is growing evidence that it may be the latest in Mercedes-Benz's increasingly elaborate attempts to get rid of its American division. Two weeks before the ailing car maker turned up in a retiree's boot police in Michigan reported apprehending two men with "strong German accents" trying to throw several sizeable objects into the Detroit River. "Our officers noticed the men attempting to hoist a sack over bridge railings at approximately 1:30am," said a police sspokmean. "The sack appeared to contain two under-utilised automobile production facilities under heavy union control. In the open trunk of a nearby vehicle officers observed several other sacks, at least one possibly containing full size clay models of unattractive cars crudely saddled with generic styling cues of a retro nature, and 20,000 unsold Jeep Commanders. Upon being approached, the two men fled in their vehicle, openly sobbing".
Meanwhile, only this week staff at John F Kennedy airport prized open a suspicious left luggage locker to find it had been stuffed with financially crippling healthcare commitments and 30,000 unsold Jeep Commanders. Furthermore, at this week's New York motor show DaimlerChrysler boss Dr Dieter Zetsche was seen acting suspiciously around other car maker's stands before clearly abandoning a large briefcase near to the BMW display. When the case was returned to him, Dr Zetsche initially tried to deny all knowledge that it was his, a plee he swiftly retracted when the briefcase was opened and found to contain woeful inefficiency and a failure to anticipate trends towards smaller vehicles in the US and global non-premium markets.
"All of this means nothing," said a DaimlerChrysler pskoesman later. "We are talking to a number of parties interesting in Chrysler and there is no suggestion that we literally can't give it away
Moderator :: Performance Mods
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From: A Den in Maryland
Union heavy-handedness and pension/healthcare issues are only a small part of the ills that doomed the merger. For one thing, what was initially touted (and signed off on) as a 'merger of equals' ended up being a 'takeover' of Chrysler, with much of their original North American management and corporate governance being shucked off and replaced by Daimler people. The sharing of components and models never took off, since Daimler avoided diluting their treasured marques with anything developed in the Chrysler house. Chrysler was able to have the Crossfire coupe as their M-B platform-based ride, but it was essentially an outdated platform on it's way out when the car was designed. Dodge tossed the aging Ram Van for the Sprinter, which was a peculiar M-B homegrown truck that was marketed here first by Freightliner. Some componentry sharing eventually came about in some lines, such as rear suspension parts under the 300M and Charger, a diesel engine in the Liberty SUV (now discontinued), etc, but it really didnt take off for two related and opposing reasons. One, as above Daimler did not want anything diluting their M-B brand pedigree, and people would balk at the thought of paying a premium for a lot of Chrysler/Dodge nameplates.
I felt the 'merger' was doomed from the start and I was right, and for all the reasons that are going down now. Chrysler was doing pretty well during the time of the takeover, and since then, the division had lost their momentum and direction from the corporate pressure and unfamiliar market thinking from their upscale management.
Cerberus. What an appropriate name for that holding company.
I felt the 'merger' was doomed from the start and I was right, and for all the reasons that are going down now. Chrysler was doing pretty well during the time of the takeover, and since then, the division had lost their momentum and direction from the corporate pressure and unfamiliar market thinking from their upscale management.
Cerberus. What an appropriate name for that holding company.
6th Gear
Joined: Mar 2007
Posts: 1,995
Likes: 1
From: NC
MB owns a very large part of Freightliner-if not all of it which is why the sprinter was sold for the commercial market here with the FL logo on the front and the Pacifica also has a good but of MB stuff. The Crossfire is basically a rebodied SLK(previous version) but this merger was never going to work as MB could not get anything out of it. It was the misguided dream of Juergen Something ( I can not remember right now) that got sacked by the board not too long after the merger and the current board has been trying to make it work and dumping way too $$ in to chrysler ever since. Unfortunatly it hurt the MB product (quality has slipped)starting about 03 and that wass the final straw. Luckily for MB buyers is that getting back the quality is the main focus.
There will never be an end for Chrysler.
Thank god the Germans have no say in desgining
for one of the last great car companies.
This may be a bad thing, we may have to say goodbye to the '09 Challenger now....
Thank god the Germans have no say in desgining
for one of the last great car companies.
This may be a bad thing, we may have to say goodbye to the '09 Challenger now....
6th Gear
Joined: Sep 2005
Posts: 2,416
Likes: 0
From: Chicago, NW Burbs
I just saw this posted on cnn.money.com. I keep wondering when the U.S. auto industry will hit bottom, but investors just keep fleeing.
German automaker will end up actually paying $650 million to unload Chrysler to end its exposure to billions in ongoing losses, healthcare costs.
NEW YORK (CNNMoney.com) -- DaimlerChrysler moved to undo the most expensive and one of the least successful mergers in auto industry history Monday as it agreed to essentially pay to dump the money-losing Chrysler unit which it paid $37 billion for nine years ago.
DaimlerChrysler (Charts) announced it will sell an 80 percent stake in its U.S. brand to Cerberus Capital Management, a private equity investment firm that will pay $7.4 billion.
But the German automaker, which will be renamed simply Daimler, will not actually get most of the money that Cerberus is paying for the once proud automaker. Instead Cerberus will contribute $5 billion to the Chrysler auto operations it will now control, with just over another $1 billion going to Chrysler's finance arm.
While Daimler will receive the remaining $1.4 billion of Cerberus' capital contribution to the sale, Daimler expects to have to cover another $1.6 billion in Chrysler losses before the deal closes. So Daimler estimates that it will end up paying out about $650 million to close the deal, and that its earnings for 2007 will take a $4 billion to $5.4 billion profit hit due to charges related to the transaction.
What Daimler gains from the deal is closing the door on ongoing losses and liability for future health care costs, for Chrysler's unionized employees and retirees, estimated to be as high as $18 billion.
and it goes on...
German automaker will end up actually paying $650 million to unload Chrysler to end its exposure to billions in ongoing losses, healthcare costs.
NEW YORK (CNNMoney.com) -- DaimlerChrysler moved to undo the most expensive and one of the least successful mergers in auto industry history Monday as it agreed to essentially pay to dump the money-losing Chrysler unit which it paid $37 billion for nine years ago.
DaimlerChrysler (Charts) announced it will sell an 80 percent stake in its U.S. brand to Cerberus Capital Management, a private equity investment firm that will pay $7.4 billion.
But the German automaker, which will be renamed simply Daimler, will not actually get most of the money that Cerberus is paying for the once proud automaker. Instead Cerberus will contribute $5 billion to the Chrysler auto operations it will now control, with just over another $1 billion going to Chrysler's finance arm.
While Daimler will receive the remaining $1.4 billion of Cerberus' capital contribution to the sale, Daimler expects to have to cover another $1.6 billion in Chrysler losses before the deal closes. So Daimler estimates that it will end up paying out about $650 million to close the deal, and that its earnings for 2007 will take a $4 billion to $5.4 billion profit hit due to charges related to the transaction.
What Daimler gains from the deal is closing the door on ongoing losses and liability for future health care costs, for Chrysler's unionized employees and retirees, estimated to be as high as $18 billion.
and it goes on...
6th Gear
Joined: Mar 2007
Posts: 1,995
Likes: 1
From: NC
Jeep is wrapped in the Chrysler package for now. I wouldn't be surprised if the new owner doesn't sell off divisions-espcially those with vakue like Jeep to help fund this thing like BMW did with the Rover buy. I think MB is going to stick with MB from now on. They do retain Smart-that was never a Chrysler product and MB has a large commercial division but that has been around since the 20's or earlier.
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