From an article in todays Telegraph Business section.
Chrysler Group could be put up for sale in a move that would reverse the discredited 1998 merger that brought together two of the most famous names in motoring: Daimler and Chrysler.
As it unveiled job cuts that went far deeper than most analysts had anticipated, parent company DaimlerChrysler said it was "looking into further strategic options" for its US division, which alongside rivals General Motors and Ford has struggled in the face of higher costs and stiffer competition from Asia.
"No option is excluded," the company said. Reports in Germany suggested that an investment bank has already been hired to explore a possible sale of the division. As part of its restructuring, Chrysler said it would shed 13,000 jobs - 16pc of its workforce - over the next two years and close factories in North America as it pushes to return to profitability by 2008.
Some 9,000 US hourly workers will lose their jobs, along with 2,000 employees in Canada and a similar number of salaried staff.
The company will take a $1.3bn hit to pay for the restructuring, which it hopes will save it $2bn a year, or $1,000 off the cost of every car sold in the US.
The plans were unveiled as the company, which is the world's fifth-largest car maker, posted a 40pc drop in fourth-quarter profits, mainly due to weaker demand for Chrysler products. Profit tumbled to $761m from $1.28bn a year ago, while Chrysler itself posted a loss of $1.5bn.
Revenue slipped to $54bn, with sales of Chrysler vehicles falling 7pc, offsetting a 5pc rise in sales of Mercedes models. The latest redundancies come five years after 26,000 jobs were axed and six plants closed.
Yesterday's job cuts will reduce by 400,000 the number of vehicles that the company can produce each year.
"A divorce on earth will follow the marriage made in heaven," one company manager said, referring to the 1998 merger that never lived up to its potential and instead often triggered tension between hostile camps of German and US managers.
At the time of the merger, the stock traded at around $100 a share. It fell back sharply and never came close to reaching those peaks again. Yesterday, the stock was up nearly 5pc to around $64.
The announcement comes a few months after its parent company insisted that Chrysler was not for sale. But pressure has increased since then. Earlier this week, a German investment fund with a 1pc stake in the company called for the merger to be unwound.
However, selling the business may be hard. Oppenheim analyst Michael Raab estimated it would cost ?26bn ($34bn) to separate the two divisions. Analysts suggested a Chinese carmaker bent on expansion would find it attractive if the price was right, while linking Chrysler up with Renault or Volkswagen could offer small-car expertise Chrysler lacks.
If the poor range sold by Chrysler UK (except 300C) is anything to go by the future is certainly not too rosy. Any one want a Chrysler...................?
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Roger
I read frequently, but only post when I have something useful to say.
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If the poor range sold by Chrysler UK (except 300C) is anything to go by the future is certainly not too rosy. Any one want a Chrysler...................?
It must be a csary time if you work for Chrysler and have a mortgage.
As regards the range of products, there are several new Chrylser & Jeep models being launched this year and a plethora of new Dodges, in the US AND the UK -- it sounds like it could be getting towards make or break time.
p.s. wasn't it 2 years ago that Chrysler were propping up the Mercedes part of the 'partnership' ?
MTC
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Chrysler have not made a profit for years and have never shored up DB but on the financial section of radio 4 this morning it was stated any split was fantasy thinking as they are now so intertwined with common parts.
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Chrysler have not made a profit for years and have never shored up DB
Chrysler made a profit of 1.5bn Euro in 2005, the same year that Mercedes made a 0.5bn Euro loss.
>>but on the financial section of radio 4this morning it was stated any split was fantasy thinking as they are now so intertwined with common parts.
Very true, also I can't imagine who would want to buy it.
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There you go - 2 seperate posts and both contain hugely contrasting information.
(for the record, I think that rjr is right)
MTC
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