Posted on Mon, May. 14, 2007
New Chrysler investment owners detail company's future after sale by...
New Chrysler investment owners detail company's future after sale by DaimlerChrysler
Beacon Journal staff and wire report
Chrysler LLC, renamed by new owner Cerberus Capital Management LP, will design and build vehicles under its own brand and the Dodge and Jeep nameplates while also offering loans through a financial services division.
Chief Executive Officer Tom LaSorda will stay in place, and Chrysler will keep working with ex-parent DaimlerChrysler AG's Mercedes Car Group to develop engines and transmissions as well as in purchasing and sales, Cerberus said today in a statement.
The announcement fleshed out how Cerberus will manage the automaker after DaimlerChrysler abandoned a nine-year effort to make its U.S. unit profitable. Cerberus acquired an 80.1 stake in Auburn Hills, Michigan-based Chrysler for $7.4 billion.
In Summit County, Chrysler maintains a large presence with its Twinsburg stamping plant, which makes parts for the Chrysler Pacifica and Aspen, Chrysler and Dodge minivans, Jeeps and related vehicles.
The 2.4-million square-foot factory, completed in 1957, covers 165 acres and employs about 1,760 people, according to the latest available information from Chrysler.
Elsewhere in Ohio, Chrysler has three Toledo-area factories that make the Jeep Wrangler, Jeep Liberty, Dodge Nitro and steering columns and torque converters for Chrysler vehicles. Those three factories collectively employ about 5,000 people.
``It'll likely be a tough road as an independent company,'' said John Novak, a Morningstar Inc. analyst in Chicago. Cerberus will have to strengthen Chrysler's product line, shave costs and pursue ``growth in emerging markets,'' Novak said.
LaSorda, 52, already is in the midst of cutting 13,000 jobs and closing a Delaware assembly plant as he looks to return the automaker to profitability. Chrysler posted a $680 million loss for 2006.
``As a private company, Chrysler will be better positioned to focus on its long-term plan for recovery, rather than just short-term results,'' LaSorda said in a statement. The deal is scheduled to be completed in the third quarter.
The First Ranks'
Cerberus Chairman John Snow said the New York-based private equity firm will ``take Chrysler to the next stage of profitability and growth and restore it to the first ranks of the U.S. auto industry.''
``We look at what can be done to assist management in the operation of a company,'' Snow told reporters and analysts at a press conference in Stuttgart, Germany, where DaimlerChrysler is based.
Among Cerberus's recent purchases was a 51 percent stake last year in GMAC, the auto and home lender once wholly owned by General Motors Corp. Cerberus said $1.05 billion of its Chrysler investment will go into the company's financial services unit.
Chrysler's auto operations, like those of GM and Ford Motor Co., are losing U.S. market share to Asian rivals led by Toyota Motor Corp. Chrysler fell to fourth in U.S. sales last year.
Snow, who was U.S. treasury secretary from 2003 to 2006, and LaSorda are scheduled to attend a press conference at 1:30 p.m. tomorrow at Chrysler's Michigan headquarters.
United Auto Workers President Ron Gettelfinger, who last month said he would resist a private equity sale, said today he backs the Cerberus acquisition. He said he wants to help make Chrysler LLC successful and prove that DaimlerChrysler CEO Dieter Zetsche made the wrong bet in selling the unit.
``It's a more local feel for Chrysler since it won't be connected to Daimler,'' said Alan Helfman, vice president of River Oaks Chrysler-Jeep in Houston. ``Cerberus may understand better how consumers shop and the fact they like rebates and deals. Daimler didn't seem to understand that approach as well.''
LINK: http://www.ohio.com/mld/beaconjournal/17225192.htm
New Chrysler investment owners detail company's future after sale by...
New Chrysler investment owners detail company's future after sale by DaimlerChrysler
Beacon Journal staff and wire report
Chrysler LLC, renamed by new owner Cerberus Capital Management LP, will design and build vehicles under its own brand and the Dodge and Jeep nameplates while also offering loans through a financial services division.
Chief Executive Officer Tom LaSorda will stay in place, and Chrysler will keep working with ex-parent DaimlerChrysler AG's Mercedes Car Group to develop engines and transmissions as well as in purchasing and sales, Cerberus said today in a statement.
The announcement fleshed out how Cerberus will manage the automaker after DaimlerChrysler abandoned a nine-year effort to make its U.S. unit profitable. Cerberus acquired an 80.1 stake in Auburn Hills, Michigan-based Chrysler for $7.4 billion.
In Summit County, Chrysler maintains a large presence with its Twinsburg stamping plant, which makes parts for the Chrysler Pacifica and Aspen, Chrysler and Dodge minivans, Jeeps and related vehicles.
The 2.4-million square-foot factory, completed in 1957, covers 165 acres and employs about 1,760 people, according to the latest available information from Chrysler.
Elsewhere in Ohio, Chrysler has three Toledo-area factories that make the Jeep Wrangler, Jeep Liberty, Dodge Nitro and steering columns and torque converters for Chrysler vehicles. Those three factories collectively employ about 5,000 people.
``It'll likely be a tough road as an independent company,'' said John Novak, a Morningstar Inc. analyst in Chicago. Cerberus will have to strengthen Chrysler's product line, shave costs and pursue ``growth in emerging markets,'' Novak said.
LaSorda, 52, already is in the midst of cutting 13,000 jobs and closing a Delaware assembly plant as he looks to return the automaker to profitability. Chrysler posted a $680 million loss for 2006.
``As a private company, Chrysler will be better positioned to focus on its long-term plan for recovery, rather than just short-term results,'' LaSorda said in a statement. The deal is scheduled to be completed in the third quarter.
The First Ranks'
Cerberus Chairman John Snow said the New York-based private equity firm will ``take Chrysler to the next stage of profitability and growth and restore it to the first ranks of the U.S. auto industry.''
``We look at what can be done to assist management in the operation of a company,'' Snow told reporters and analysts at a press conference in Stuttgart, Germany, where DaimlerChrysler is based.
Among Cerberus's recent purchases was a 51 percent stake last year in GMAC, the auto and home lender once wholly owned by General Motors Corp. Cerberus said $1.05 billion of its Chrysler investment will go into the company's financial services unit.
Chrysler's auto operations, like those of GM and Ford Motor Co., are losing U.S. market share to Asian rivals led by Toyota Motor Corp. Chrysler fell to fourth in U.S. sales last year.
Snow, who was U.S. treasury secretary from 2003 to 2006, and LaSorda are scheduled to attend a press conference at 1:30 p.m. tomorrow at Chrysler's Michigan headquarters.
United Auto Workers President Ron Gettelfinger, who last month said he would resist a private equity sale, said today he backs the Cerberus acquisition. He said he wants to help make Chrysler LLC successful and prove that DaimlerChrysler CEO Dieter Zetsche made the wrong bet in selling the unit.
``It's a more local feel for Chrysler since it won't be connected to Daimler,'' said Alan Helfman, vice president of River Oaks Chrysler-Jeep in Houston. ``Cerberus may understand better how consumers shop and the fact they like rebates and deals. Daimler didn't seem to understand that approach as well.''
LINK: http://www.ohio.com/mld/beaconjournal/17225192.htm
