D/C sells 80% of Chrysler for 7B$US

BKmetz

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Pat Dolan said:
How do you keep your job after costing your shareholders $30 Bn????
The now-ousted CEO of DCX, megalomaniac Jurgen Schremp, did lose his job for the merger blunder.
 

rcnaylor

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Yep, Daimler took a bath financially.

But, is that gonna be the beginning of the real end for Chrysler? If guys with the experience of MB can't turn them around, is it just a matter of time?

I read they got out from under some debt, but, still have all the pension and insurance debt.

My guess is this new private owner group will just milk the assests for whatever they can get and then try to get the govt to eat all that pension debt and health insurance debt. Anyone want to bet us US taxpayers wind up losing more on Chrysler than Daimler did?
 

MrMopar

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40X40 said:
http://money.cnn.com/2007/05/14/news/companies/chrysler_sale/index.htm?cnn=yes

They paid $37B for the whole thing in 1998, Today they sold 80% for $7B.
Oh no, read further.

Daimler Benz paid $37 billion for Chrysler. They're "selling" Chrysler for $7.4 billion, but that money isn't going to Daimler. $5 billion of it is going to the new Chrysler that Cerberus now controls - so they're essentially paying $5 billion to themselves. Another $1 billion is going to the new Chrysler financial company that Cerberus now controls - another $1 billion paid to themselves. That leaves $1.4 billion going to Daimler, but wait - Daimler will cover $1.6 billion in costs before the deal closes.

Bottom line: Daimler will pay $650 million for Cerberus to take Chrysler - and Daimler earnings will be down about $5 billion more in losses because of this sale transaction. CERBERUS IS BEING GIVEN A FREE CAR COMPANY, AND DAIMLER IS PAYING FOR THE PRIVILEGE OF DUMPING A MONEY-PIT. That's important enough of a point to put in bold, italics, AND underline. Daimler will keep 20% of Chrysler, but Chrysler is looking more and more like a zero automaker. 20% of zero is still zero.

Total cost to Daimler = about $43 billion over 9 years, not including annual losses or other money spent that can't easily be accounted for. That's about $4.8 billion a year. With regards to this Chrysler investment, that means that anyone reading this who made a single dollar in about the last decade (or at least managed to lose less than $42,999,999,999.99) officially did better than Daimler.


edit to fix my math - I left a few 9's out of my loss figure at the end
 
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BrianCT

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MrMopar said:
Oh no, read further.


that means that anyone reading this who made a single dollar in about the last decade (or at least managed to lose less than $42,999,999.99) officially did better than Daimler.
You're brilliant at summary.

But it reads too sad too fast.:(

Now Ford, then Chevy. It will be fun to only see imports as domestics. Wait? Imports made in the USA called domestics.

Call this all global.

BrianCT
 

MrMopar

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BrianCT said:
You're brilliant at summary.

But it reads too sad too fast.:(

Now Ford, then Chevy.
Oh, I didn't even touch on the 800 pound gorilla in the room. If the value of Chrysler is such that Daimler will pay to get rid of it, what value is placed on GM and Ford?
 

sebring96hbg

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Daimler printed $36 billion in stock to acquire Chrysler. No cash changed hands until Daimler took Chrysler's $8 billion cash pile and $14 billion in profit.
 

mavapa

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However you count the money, I suspect Chrysler's days are numbered. Oh well. Maybe after Dodge bites the dust, GM or Ford can start buying Cummins engines.
 

VictrolaJazz

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rcnaylor said:
My guess is this new private owner group will just milk the assests for whatever they can get
Studebaker/Packard all over again, exactly 50 years later...
 

Kayakkermit

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Tis a sad day in the Dodge camp. I've been a Dodge guy all my life after my first car.
Yes, Chrysler has had their share of problems. They managed to effectively revolutionize the way the automotive sector worked with the introduction of the K-car, which although was no great technological or quality marvel, it brought about a new way of thinking.
Dodge over the past couple of years has reintroduced actual style to their cars and trucks, while the rest of the 'old boys kept forcing crap designs down our throats.
I think the current and very upcoming designs are some of the best that any manufacturer has had in a very long time, and I really hope that the company isn't killed or sold off piecemeal.
Yes, their quality sucks, but to no less degree then either of the other Big Two (N.A.) manufacturers, and in fact in a lot of ways is actually better.
Get rid of Plymouth and Jeep. Plymouth is mostly sister cars to Dodge anyway, and the Jeeps of today are not the Jeeps that earned the reputation.
Put a diesel in the Caravan, keep producing the Magnum and Charger, and bring out the Challenger.
"If you build it, they will come"
 

CoriolisSTORM

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Kayakkermit said:
Get rid of Plymouth and Jeep. ... and the Jeeps of today are not the Jeeps that earned the reputation.
"If you build it, they will come"
Plymouth has been gone several years now. I believe their last model was the Prowler. I am quite happy with my Wrangler thank you, jeep needs to stay. They need to use Dodge as their main brand with Chrysler as the more upscale of the brands they have. I'm all for having just the Wrangler and a Cherokee esque vehicle in the Jeep brand, and nothing more. The Wrangler Unlimiteds are selling like hot cakes right now, and I forsee the same with the Patriots/Compasses.
 

Kayakkermit

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Sorry, I had thought the Prowler was still being produced...... being rather out-of-my-budget, I really hadn't noticed.... my bad.
I agree with you 100% on the Dodge / Chrysler argument though... Chrysler was originally the upscale, Dodge was performance - not sure under which brand the mini-van fits in there, I think they need to keep it but its certainly neither luxury nor performance.
The new Jeeps certainly have the great new styling, but IMHO they would do better becoming tough and nimble vs Highway 4x4's as they seem to be anymore, especially going unibody.
Make an affordable, rugged, efficient diesel powered Jeep and away they go, unlike the diesel they brought out that IIRC only got an extra 3mpg? I may be off on that number, but I recall thinking "why bother" with the numbers their diesel put out.
 

CoriolisSTORM

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Kayakkermit said:
Sorry, I had thought the Prowler was still being produced...... being rather out-of-my-budget, I really hadn't noticed.... my bad.
I agree with you 100% on the Dodge / Chrysler argument though... Chrysler was originally the upscale, Dodge was performance - not sure under which brand the mini-van fits in there, I think they need to keep it but its certainly neither luxury nor performance.
The new Jeeps certainly have the great new styling, but IMHO they would do better becoming tough and nimble vs Highway 4x4's as they seem to be anymore, especially going unibody.
Make an affordable, rugged, efficient diesel powered Jeep and away they go, unlike the diesel they brought out that IIRC only got an extra 3mpg? I may be off on that number, but I recall thinking "why bother" with the numbers their diesel put out.
The CRD Liberty got a rating of 22-26 MPG city-highway. Of course, like all diesels it could average well over 30 MPG. I want one if I ever find one and it is within my budget, but the automatic has GOT TO GO. Agreed that tough and nimble would be better than highway capable (we call them mall-rated on jeep forums). Unibody is pretty good though, think about the original Cherokees (the downsized ones that is, the XJs)
edit: This leaves me to wonder, will the 3.0L CRD Grand Cherokee be affected by this?
 
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mavapa

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If I had to guess, I would guess that the buyers plan to sell off chunks of Chrysler, and I would further guess that Jeep would be the first to go on the block because I think it could bring a tidy sum.
 

MrMopar

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I never really understood what interest Daimler had in buying Chrysler in the first place. After the purchase, irony was found in that one symbol of American victory in World War II (the Jeep) was now owned by the Germans.

Now the Chrysler group is owned by a cut-throat investment firm (Cerberus) named after the Greek 3-headed hound that guarded the gates of Hades to ensure that nary a soul could escape.




Best of luck to the UAW when their balls are --><-- this close to the bandsaw. I can easily see Cerberus dumping pensions, canning employees, and flipping the modern capital (modular factories - Belvidere, IL) to upcoming foreign manufacturers to squeeze a few dollars from their investment. Toyota or Honda would like to expand in the USA, so why not with factories that are already built?
 
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uberdiesel

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It's ironic that so many boldly designed, good looking and well built cars came into the market as fuel prices soared and DaimlerChrysler didn't make money.

I hope that Chrysler, newly freed of the weight of debt and wiser with the engineering, design and manufacturing expertise it gained through its years with Daimler can move forward with good cars and good domestic jobs. The American manufacturing glory days of post WW2 are definitely over; the possibility of good products and profitability is not!

Otherwise, this is going to hurt...
 

TornadoRed

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A few final thoughts, in no particular order...

My dad always drove Dodges -- Dodge cars, Dodge pickups -- mainly, I think, because the guy who owned the agency was a friend. (Agency, not really a dealership) But eventually he bought an Oldsmobile, and then another Oldsmobile. Big, hulking landcruisers that I hated. But I didn't care for the Dodges either.

I knew a friend of a friend who owned a series of late-60s Dodge Chargers and Plymouth Roadrunners. He was a drug dealer (weed only) who didn't like to keep the same car for very long. But they were all in top condition when he bought them and when he sold them. Decent cars. I can't think of too many Chrysler Corp cars built since then that were very interesting.

I suppose I expected the merger of Daimler and Chrysler to produce great cars and great synergies. I don't know why it all went wrong. Probably the Germans were afraid of putting too much Mercedes technology into cheaper cars, diminishing the Mercedes allure.

But Chrysler really needed new ideas, new engines, new transmissions, new standards of quality. It was okay to build PT Cruisers on the Neon platform -- but it was not okay to keep building them year after year because they didn't have any other ideas of what else to build.

Jeep actually has a decent lineup, all it needs are diesel engines in every model. But I'm not sure about the current lineup of Dodges and Chryslers. In an era of increased emphasis on fuel economy, there is something odd about designing cars with practically no aerodynamic qualities. I'm sure it is easier to engineer a car that way -- you can fit tall engines in there that wouldn't fit in a smaller compartment. But the cars they built in the 1990s, the Stratuses and Cirrruses, at least looked as as though they could be fuel-efficient. The Avengers and Magnums are great designs for another era -- maybe if they drop the "It's got a Hemi" tagline and substitute "It's got a V6 turbodiesel with 400 pounds of torque, and gets 45 mpg on the highway, and has a range of 900 miles per tank"?

And if the Calibre and Compass has engines very much like the 2.0 TDI, who wouldn't want one? Instead they have dinky 1.8 gas engines with not much power below 4000-5000 rpm.

Chrysler, and Ford and GM, suffer from a problem with timing. They are always about five years late when they introduce new models. That makes it hard to catch up with the competition.
 

MR42HH

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Apart from LX cars and the stupid Crossfire, where was the synergy between Daimler and Chrysler on the American market?
They had at least two potential hits:
  • PT Cruiser with a 150hp Mercedes diesel is available in Europe: Would have been unique on the US market
  • 300C with the Mercedes V6 CDI is available in Europe, would have been the only American sedan with a diesel in the US
It's my understanding that the could have had a chance if they had offered something unique. Dr. Z should just have dieselized everything.

Sure, potential flop. But look at the Sebring/Aspen. Those are made to be 100% flops.
 

jbrone

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MrMopar said:
I never really understood what interest Daimler had in buying Chrysler in the first place. After the purchase, irony was found in that one symbol of American victory in World War II (the Jeep) was now owned by the Germans.

Now the Chrysler group is owned by a cut-throat investment firm (Cerberus) named after the Greek 3-headed hound that guarded the gates of Hades to ensure that nary a soul could escape.




Best of luck to the UAW when their balls are --><-- this close to the bandsaw. I can easily see Cerberus dumping pensions, canning employees, and flipping the modern capital (modular factories - Belvidere, IL) to upcoming foreign manufacturers to squeeze a few dollars from their investment. Toyota or Honda would like to expand in the USA, so why not with factories that are already built?
Cerberus is scary - they almost sank my company. The best day in years was when Cerberus sold us to another non-investment firm company.
 

CoriolisSTORM

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I would like a diesel 2.0L Caliber like Europe gets, my 2.4L Caliber is alright, but it isn't a speed demon, and like many have said Chrysler needs some 4 cylinders that make power down low not at 5k+ like these seem to do. VW I5 in one anybody?:D
 
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