DaimlerChrysler sold for $7.4 billion

[ryanmcv]

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 sell its money-losing Chrysler unit for only a fraction of what it paid nine years ago.

DaimlerChrysler announced it will sell an 80 percent stake in its U.S. brand for $7.4 billion to Cerberus Capital Management, a private equity investment firm. The private equity sector has become a major force in acquisition of publicly owned companies in recent years, often buying troubled operations at a bargain price.

"We are aware that Chrysler faces significant challenges, but we are confident that they can and will be overcome," said a statement from John Snow, the chairman of Cerberus and the U.S. Treasury Secretary from 2003 to 2006. "A private investment firm like Cerberus will provide management with the opportunity to focus on their long-term plans rather than the pressures of short-term earnings expectations."

Read the full story here: CNNMoney.com Article
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[hyde]

This is interesting, no mor Dr. Z, I guess..

Who are the owners of Cerberus Capital Management? Any ideas who's behind them.. I liked zee germans before, who is it now?

 

[desertkj]

Wow. That just proves that Dieter Z truly is absolutely ********.

 

[hyde]

So, is it going to be Cerberus Chrysler?

 

[MoladoGuy]

No dude. Cerberus is just the financial backers for the organization. Chrysler will still be called Chrysler. In fact, Cerberus own 51% of GMAC along with other major market companies, none of which is called Cerberus. They are only the investors.

Problems will begin at Chrysler though since the UAW has said do not agree with Cerberus ownership. They fear wages will be drastically cut along with pension plans, health care, benefits, etc.... Some of the news articles portray the UAW as "excited" and "motivated" for the new ownership. That is just far from the truth lol!

 

[desertkj]

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[desertkj]

I just found this at Fox News:
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"But United Auto Workers President Ron Gettelfinger called it the best choice.
Private equity firms typically use money provided by pension funds and hedge funds and wealthy private investors to acquire public companies or parts of companies and take them private, often to reorganize and later sell at a profit.
"The transaction with Cerberus is in the best interests of our UAW members, the Chrysler Group and Daimler. We are pleased that this decision has been made," he said.
That was a shift from earlier this year, when Gettelfinger warned that a private equity buyer would "strip and flip" the company by selling it off in pieces."
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[Marlon_JB2]

I won't comment on how the union really feels until I hear it from a ... few people... who will tell me the truth.

But, I'm still unsure about this.

 

[Dave]

Welcome back Chrysler, and good by Dr Z and Company.

Now we have the "Big 3" back. I hope this works out.

Dave

 

[thecause17]

Now we have the "Big 3" back.

Dave

Yeah, Toyota, Honda, and Nissan...that's the way it's headed....

 

[Marlon_JB2]

BIG NEWS:

CAW (along with UAW) are NOW ON BOARD AND APPROVE THE BUYOUT!!!!

 

[_UnLiMiTeD_]

will this have an effect on any jeep models that are made or not made or whatever?

 

[MoladoGuy]

will this have an effect on any jeep models that are made or not made or whatever?

(crossing fingers).... Maybe this will push the Gladiator back into the spot light. Now that the Commander is leaving us soon they could use a truck in the lineup. Run it off the same line to!

 

[Marlon_JB2]

(crossing fingers).... Maybe this will push the Gladiator back into the spot light. Now that the Commander is leaving us soon they could use a truck in the lineup. Run it off the same line to!

Hmm, not possible unless they base the next Grand Cherokee off the Wrangler Unlimited platform as seen with the Gladiator Concept.