From Dave over on the "other" site:

http://www.detnews.com/apps/pbcs.dll/article?AID=/20070513/UPDATE/705130357/1148/rss25

From Dave over on the "other" site:

http://www.detnews.com/apps/pbcs.dll/article?AID=/20070513/UPDATE/705130357/1148/rss25

hmmmm...guess no 7spd mb tranny in '09

http://forums.offtopic.com/images/smilies/tear.gif

hmmmm...guess no 7spd mb tranny in '09

That was exactly my first thought as well! Recent Chrysler products have really benefited from the MB connection (LX platform, SRT to name a couple) I'd be really curious to know who their automotive suppliers will be once MB is out of the picture.

http://www.cnbc.com/id/18646336

Cerberus Agrees to Buy 80.1% Stake in Chrysler for $7.4 Billion
Topics:Mergers & Acquisitions | Private Equity | Automobile Industry
Sectors:Automobiles and Parts
Companies:DaimlerChrysler AG
By CNBC.com | 14 May 2007 | 06:01 AM ET

Germany's DaimlerChrysler [DCX 82.0 --- UNCH (0%)] said Monday it will sell a majority stake in U.S. automaker Chrysler to private equity group Cerberus Capital Management for 5.5 billion euros ($7.4 billion).

An affiliate of Cerberus will own 80.1% of the newly formed Chrysler Holding, while DaimlerChrysler will retain 19.9%.

Shares of DaimlerChrysler rose more than 7% in German trading.

Of the 5.5 billion euros Cerberus will pay for the stake, 3.7 billio euros ($5 billion) will go into the automaking buisness of Chrysler, while 800,000 euros ($1.1 billion) will be put into the financial services business. DaimlerChrysler will receive 1 billion euros ($1.35 billion).

Daimler-Benz paid $36 billion for Chrysler in 1998.

"It's the best sort of deal DaimlerChrysler could have got," Howard Wheeldon, senior strategist at BGC Partners, told "Worldwide Exchange," noting that DaimlerChrysler couldn't afford to keep throwing cash into the money-losing operation.

"But Chrysler remains a company worth salvaging," Wheeldon said.

For DaimlerChrysler, the fact that former Chrysler chier operating officer Wolfgang Bernhard was advising Cerberus added a "comfort factor" that the buyer of the majority stake would have a good level of understanding about the busines, CNBC's Phil LeBeau said.

For Cerberus, the most positive aspect is it can combine Chrysler's financial arm with its 50.1% holding of General Motors'
General Motors Corp (GM)
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[GM 29.46 --- UNCH (0%) ] financing arm, GMAC, to create a substantial auto-lending presence, LeBeau said.

Union Backing, No New Job Cuts

Importantly, the deal received the support from leadership of the United Auto Workers, the major union representing Chrysler's blue-collar employees.

"The transaction is in the best interest of our UAW members, the Chrysler Group and Daimler," UAW President Ron Gettelfinger said in a statement.

Chrysler Group President and CEO Tom LaSorda, who will remain as the head of the company, said in a statement there would be no new job cuts in connection with the deal to sell to Cerberus.

"Cerberus is the right strategic buyer for Chrysler, with a long-term commitment to Chrysler's growth and success," LaSorda said.

"As a private company, Chrysler will be better positioned to focus on its long-term plan for recovery, rather than just short-term results," he added.

But the real test will come later this summer when the UAW sits down with Chrysler management for contract negotiations, LeBeau said.

Just because the UAW endorsed the deal "doesn't beam these negotiations are going to be smooth," he said.

The company will hold a press conference about the deal at 8 am New York time.

Wow, thanks for that post! Looks like the best possible deal for Chrysler.

FYI----

http://articles.moneycentral.msn.com/Investing/Dispatch/Chryslersale.aspx?GT1=10018

Hmm I wonder what this mean for us Jeep owners.......

I wonder what effect it will have on the longevity of our GCs?

Will Daimler products still be infused with Chrysler vehicles so that Chrysler mechanics keep up on latest service techniques (as if they already do)?

Will we be taking our trucks to the Mercedes dealerships for tranny work, especially after the warranty period? B-O-H-I-C-A !!!!!!

I'm sure Daimler won't feel too obligated to support Chrysler production development, unless it's written in the contract.

I think they are glad they can dump this "hot, steamy" one on someone elses porch and hope their 20% turns into a gold mine after a IACOCA ???? wanna-be sells 200 million retro K-cars.

I could be wrong, but then there'd be no reason to call me a pessimist. Plus, who cares......I still love my GC.

Well, the people who put them together sure aren't happy, that's for sure:


Jeep workers upset about Cerberus deal
Jack Herman | Automotive News


DETROIT -- A group of UAW members that wanted to launch an employee buyout bid for the Chrysler group lashed out today against DaimlerChrysler executives and the UAW.

DaimlerChrysler announced this morning it will sell Chrysler to private equity giant Cerberus Capital Management. Blackstone Group, another private equity concern, and another well-funded group led by Magna International Inc. also were bidding on Chrysler, along with Las Vegas billionaire Kirk Kerkorian.

UAW President Ron Gettelfinger said in a statement this morning that the Cerberus deal is in the "best interest of our membership."

Despite their status as a long-shot bidder, workers at Chrysler's Jeep plant in Toledo, Ohio, had been trying for weeks to get a seat at the bidding table.

"Daimler and the UAW orchestrated a delay campaign to keep the employees from making a bid," said Michele Mauder, president of the Chrysler Employee Buyout Committee, in a statement. "They delayed responding or didn't respond at all to push the timing of our actions back."

The Chrysler Employee Buyout Committee recently had hired investment bankers Morpheus Capital Advisors to help formulate a bid but never received serious interest from DaimlerChrysler. Mauder says the group will fight for the chance to make an offer.

In her statement, she criticized DaimlerChrysler's business sense and Gettelfinger's leadership.

"Daimler is basically paying $650 million to get out from under the pension liabilities in this deal," Mauder said.

Later, she added: "The UAW has not kept its word to the UAW membership, and the sale is shameful. Public statements from the CAW and UAW strongly objected to any deal that included private equity. Apparently," she said, Gettelfinger "has learned how to speak out of both sides of his mouth."

Gettelfinger was scheduled to hold a press conference in Detroit this afternoon.

The UAW represents about 50,000 Chrysler employees. The Canadian Auto Workers represents another 10,500 workers.

Local CAW officials in Canada say they are waiting for more information -- and CAW President Buzz Hargrove's meeting with Chrysler officials -- before passing judgment.

"It's too soon to tell; there's not enough detail out there," said Gary Taylor, president of Local 1498, which represents office, clerical and engineering workers in Chrysler's Windsor, Ontario, plant. "There's far too much unknown as to how this will play out."

Vince Bailey, CAW Local 1285 president, said: "Most union members are in wait-and-see. There's been so much printed in the paper, so many companies mentioned, nothing confirmed. It almost a matter of what paper you read."

It's a tough situation for members, he added.

Bailey told Automotive News: "It's very, very difficult when you don't know where your future lies or who it lies with."

This will need to be very closely watched. The MO of this kind of deal is to make money quickly. Invest 7.4Billion and take it apart selling it piecemeal for more than the purchase price. Why wouldn't DC do that themselves? Because they are/will still be in the business of manufacturing autos...Cerebrus has never been in that position. If Cerebrus fires everyone and cuts legacy debt to the bone it will not affect their future business to have the unions etc very mad at them.

They are saying that they intend to continue to run Chrysler as a manufacturer, and I hope they are going to do so in good faith and successfully, not just make a show of it, and later say sorry it didn't work out so we broke it up.

This may be stupid point but what kind of offer could employees offer that would beat the $7b cash deal? That's over $100,000 per employee?!?! Forgo their pension and/or work free for a year?

Cerebrus already has a history of dismantling companies apart piece by tiny piece

Cerebrus already has a history of dismantling companies apart piece by tiny piece

YEP, oddly enough they are bidding to buy the company a relative contracts to and are expected to do exactly that, sell off the pieces.

With how integrated the Chrysler products are I can't imagine it making sense to do that with of any of them, how many Chrysler/Jeep or Dodge/Jeep combos are there out there? Chrysler Financial is the only part where that might make sense, are there any others?

I expect we won't be getting any more unbelievable halo products like the ME412 or excellent but mis-calculated cars like the Crossfire.

http://www.autoblog.com/2007/05/15/chryslers-tom-lasorda-webcast-at-1-30-pm-est/

http://www.autoblog.com/2007/05/17/chrysler-corp-will-revive-pentastar-logo/

Love this site and think they give some valid points:

From:
http://www.allpar.com/weblogs/2007/05/14/chryslers-been-sold-now-what

The sale of Chrysler in depth (updated 5-16 pm)
Filed under: Chrysler (CC/CG), DCX — Dave @ 8:03 am

Cerberus took ownership of about 80% of Chrysler Group, including Chrysler Financial, in return for a guaranteed investment, assumption of liabilities as well as assets, and a token payment that appears to be less than the transaction and sale costs. The deal was incredible, considering that Chrysler + Chrysler Financial appeared to be running at a net profit for most of the recent past, and the terms appear to reflect leaked statements by DaimlerChrysler board members (and public statements from stockholders) to the effect that Chryler was less than worthless.

The details: Cerberus pays $7.4 billion, $5 billion of which goes to Chrysler Corporation LLC and $1.05 billion to Chrysler Financial Services; Daimler gets the remaining $1.35 billion, but loans back $400 million of it. Daimler retains all debt from Chrysler Group, costing Daimler a net $650 million plus prepayment compensation of $878 million and transaction costs. Chrysler’s pension fund is currently overfunded but the health care costs are a major issue. Closing of the deal is expected in the third quarter of 2007.

The five key reasons for choosing Cerberus were "a sustainable, successful future for Chrysler; minimal risks and liabilities for Daimler in the future; the certainty of the transaction; speed; and the value of the transaction." Other reasons suggested by Allpar readers include being able to keep a chunk to continue to profit from Chrysler; realization that Mercedes would never integrate money-saving Chrysler technologies, outside of certain assembly processes adopted early on; that Mercedes was unwilling to share any current technology, and that Mercedes-priced components and architectures made cars below the $30,000 level uneconomical; needing the cash; wanting to be free from the health-care liabilities; and realizing that Daimler was completely unable to run Chrysler, any more than BMW was able to run Rover.

Chrysler does owe Dieter Zetsche a debt of gratitude. It would have been easy for him to continue in the footsteps of Juergen Schrempp, and to keep squeezing and downsizing and perhaps acquiring new companies to squeeze and downsize and merge together. It may also have been easy for him to sell Chrysler for more cash - for example, to Kirk Kerkorian (not that we can say for sure whether that would have been bad, especially as Kirk was talking employee ownership and has Jerry York on his side). But we suspect that he actually protected Chrysler as much as he could, given his possibly tenuous status at DCX - with Juergen Schrempp & Co still very much active on the Board - and did try to create a soft landing.

......more here:

http://www.allpar.com/weblogs/2007/05/14/chryslers-been-sold-now-what