Thursday, February 15, 2007

Daimler Sell Chrysler?

STUTTGART, Germany — DaimlerChrysler boss Dieter Zetsche is studying a proposal to sell the Chrysler Group, as the company's financially embattled U.S. subsidiary unveiled the latest in a series of massive restructurings aimed at returning Chrysler to profitability by 2008.

ChryslerIn a company statement describing details of the Chrysler restructuring plan, Zetsche said: "We are looking into further strategic options with (other) partners....We do not exclude any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler."

It is the first official indication that the parent company is considering a potential spin-off or sale of the U.S. automaker it acquired in a controversial 1998 "merger of equals."

As part of Chrysler's latest overhaul, the company will shed another 13,000 jobs and will shutter its truck plant in Newark, Delaware, in 2009. Chrysler said it is also reducing the number of vehicle platforms from 12 to seven by 2012, while investing $3 billion in new engines and transmissions.

In Germany, the newspaper Handelsblatt, citing sources on DaimlerChrysler's supervisory board, reported that Zetsche has commissioned a U.S.-based investment bank to examine all possible options for Chrysler following news that the American company posted losses totaling nearly $1.5 billion in 2006.

"Everything is possible," a board source told Handelsblatt, adding, "It is more likely that something drastic will happen than that nothing will happen." Handelsblatt said Zetsche's options include a partial or complete sale of the company.

Among the possibilities open to Zetsche is the formation of an alliance with another carmaker. Recent speculation within European automotive and financial circles has linked Chrysler with Renault, though both sides deny talks have taken place.

A further alternative before Zetsche, according to Handelsblatt, is spinning off Chrysler and refloating it on the New York Stock Exchange.

In Detroit, Chrysler said key elements of its latest three-year "recovery and transformation plan" include reducing the company's longstanding focus on trucks, utility vehicles and minivans, and broadening its sales reach beyond North America.

As part of its product offensive, Chrysler said it will launch more than 20 new and 13 refreshed vehicles by 2009, including the redesigned Chrysler Town & Country and Dodge Grand Caravan, the Dodge Avenger and the Jeep Liberty. The company also plans to introduce a new B-segment compact imported from Chinese automaker Chery.

Chrysler's powertrain plan includes provisions to develop a new family of V6 engines under the internal name Phoenix, as well as a new dual-clutch transmission in partnership with Getrag.

© Source: article on insideline
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