http://www.msnbc.msn.com/id/18645179/

Chrysler Group to be sold for $7.4 billion
Automaker sells 80% to Cerberus, ending dreams of creating auto giant

FRANKFURT, Germany - German-based DaimlerChrysler said Monday it will sell almost all of money-losing Chrysler to a private equity firm for $7.4 billion, backing out of a troubled 1998 takeover aimed at creating a global automotive powerhouse.

Eighty percent of Chrysler Group, burdened by high pension and health costs and declining market share in the United States, will be sold to Cerberus Capital Management, which is taking a huge risk by agreeing to take on billions of dollars in pension and retiree health care costs at Chrysler.

Chaired by former U.S. Treasury Secretary John W. Snow, Cerberus has steadily been building strength in the automobile business. It led a consortium that bought a majority stake last year in General Motors Acceptance Corp., the financial arm of GM, and plans to invest in ailing auto parts giant Delphi.

The prospect of a sale to a private equity firm had worried unions in the United States and Canada because of the firms’ tendency to slash costs and jobs. But United Auto Workers President Ron Gettelfinger on Monday called the sale to Cerberus the best choice.

Daimler Chrysler AG, which paid $36 billion to take over Chrysler almost nine years ago, will retain 19.9 percent of Chrysler and continue to work with it on drive systems, purchasing, sales and financial services outside North America. But it was clear that DaimlerChrysler and its chief executive Dieter Zetsche, who tried to prop up sales in the U.S. with his “Dr. Z” television commercials, had lost confidence that a combined Chrysler and Daimler could be a worldwide automotive leader.


We’re confident that we’ve found the solution that will create the greatest overall value — both for Daimler and Chrysler,” said Zetsche, who oversaw Chrysler before becoming DaimlerChrysler CEO in 2006. “With this transaction, we have created the right conditions for a new start for Chrysler and Daimler.”

Shareholders reacted positively, sending DaimlerChrysler’s shares up more than 7 percent after the deal was announced, before settling back at 64.04 euros ($86.36) for a gain of 5.6 percent.

Zetsche added that the two companies would still work together, particularly on existing conventional and alternative drive systems, purchasing, sales and financial services outside North America.

CONTINUED: UAW happy with deal
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http://articles.moneycentral.msn.com...aspx?GT1=10018


But it makes me very happy! Im sick of hearing people talk about their "Mercedes chryslers" or my "chrylser Mercedes". Stupid merge from the get go..

 

Interestingly on the news, they said they were sold as they were unable to turn
Damlier around, inferring apparently that Mercedes not Chrysler was to blame?
I think the news guy musta been smokin' something.

 

Daimler AG will still have some say in the mix here, with their 19% ownership. I don't know if that's a good thing or not.

 

Sounds like a brilliant move on MB's part.....Buy a company for 36 billion dollars and sell it 9 years later for 7.4 billion.....makes sense to me. Hopefully MB will now concentrate on improving quality to the level they enjoyed many years ago.

 

he must have been smoking many things, chrysler merged (daimler paid about 36 bill so it was really bought) cause they thought that sharing components would boost chrysler and make them a lot of money, but they realized that the market didn't quite respond as they assumed plus higher gas prices drove a lot of people away from jeep/ dodge...so daimler got rid of it, they acctually had to pay a good chunk of change to get rid of it but it was clearly hurting them more than everyone thought. oh well good ..back to PURE benz

 

most article writer and general public believe Chrysler has majority ownership in DiamlerChrysler, but they have no idea Chrysler was bought out by DiamlerBenz as said by alymo. The company name was only changed to DiamlerChrysler as part of the agreement of the purchase of Chrysler by Diamler.

DC hoped Chrysler would help in profit, but they didn't realize the new cars they recently put out pretty much all look like ***. Caliber, Sebring, Aspen, just to name a few. The only good looking car since the buy-out was the 300c.

 

chrysler will be chopped into pieces, with alot of production going to china.

Is Daimler itself now, strong enough to survive someone scooping them up?

 

i like the fact that they sold Chrysler. it was coming to a point where ppl were saying if u can afford a benz just get a Chrysler they are basically the same thing... thus bring down the benz name so i think any ways


Here is what the Daimler Chrysler site said about the sale:

http://www.daimlerchrysler.com/dccom...0-0-0-0-0.html

 

Case in point with the 300C

 

About Time they sold chrysler best news but why would they retain 19.9 percent of Chrysler. Chrysler sucks & will always suck.