Posted on 04/05/2007 12:42:59 PM PDT by kellynla
DETROIT —
Billionaire investor Kirk Kerkorian's Tracinda Corp. on Thursday made a $4.5 billion cash offer for DaimlerChrysler AG's (DCX) troubled U.S.-based Chrysler unit.
Tracinda in a statement said it wants "to build and strengthen" the troubled automaker and "will offer the UAW and Chrysler management the opportunity to participate as equity partners in the transaction."
DaimlerChrysler has been exploring the possibility of selling the Chrysler division.
Han Tjan, head of corporate communications for DaimlerChrysler in New York, said the German-American automaker is talking with possible partners about a sale and that the chairman is satisfied with the process.
"All of our options are still open. For us to talk about (Tracinda) is speculation," Tjan said.
California-based Tracinda said its offer is subject to Chrysler reaching a new collective bargaining agreement with the United Auto Workers as well as a deal with DaimlerChrysler on sharing the unfunded pension liabilities and health care costs of Chrysler retirees.
DaimlerChrysler shares climbed $2.36, or 2.9 percent, to $83.35 on the New York Stock Exchange after the announcement.
Kerkorian long has had interest in automotive companies.
Late last year he dumped the last block of what once was a nearly 10 percent share of General Motors Corp., the world's largest automaker, after GM (GM) shelved the idea he had pushed of an alliance with France's Renault SA and Japan's Nissan Motor Co.
Kerkorian's wholly owned Tracinda was Chrysler Corp.'s largest shareholder at the time of its 1998 merger with DaimlerBenz AG. Kerkorian sued the combined company in 2000, claiming that DaimlerBenz engineered a takeover of Chrysler, then cheated him out of billions by casting the deal as a merger of equals. A federal judge rejected his claim.
(Excerpt) Read more at foxnews.com ...
A girlfriend back in college days had a 63 or 64 Chrysler 300 letter model. It had the 413 with the cross ram intake; got about 10 miles per gallon or a good day.
There must be a lot of mismanagement in Chrysler, somewhere. They always seem to need bailing out. We did it once...I don’t think we should do it again.
No hemi in this bad boy! It came with a stock jet turbine engine that ran on diesel, gasoline, kerosene, jet fuel, and cooking oil at 45,700 rpm.
They’ve come a long way since then, haven’t they? I love the masculine grill on the 300; mine will be 3 years old in July and there isn’t a day I drive that I don’t think about what a great car it is.
And Kerkorian should get Chrysler for fire-sale prices.
In April of 1995, Kerkorian offered a 40% premium over the share price, an unsolicited bid of $55/share. The unions and management both harrumphed, carped, whined, sobbed and made a fuss about “a corporate raider” coming into the company.
I think Kerkorian was offering something like $22.8 billion total, and bought up over 10% of the company.
Now, 12 years later, the unions and management have conspired to drive Chrysler into the ground and Kerkorian is back — offering about $4.5 billion.
But wait — there’s more. Kerkorian sued Daimler, citing that Daimler’s top management wasn’t telling the truth about the takeover of Chrysler by Daimler. At first, the Germans were calling it a “merger of equals” and then later in interviews, Schrempp claimed that it was “never a merger of equals” but a takeover.
Here’s a bit of history:
http://money.cnn.com/2000/11/27/news/chrysler/
Taken together, the quartering of the offer and inflation, show just how much value has been lost in Chrysler since 1995. And there is no one to blame but management and the unions for this problem. It isn’t as tho Kerkorian has created these unsustainable liabilities on the cash flow of Chrysler.
The UAW had better get their heads out of their socialists behinds and realize that the US auto industry is on the cusp of having one of the Big Three simply disappear and have the remains cut up and sold off. GM isn’t going to buy Chrysler, and neither is Ford. Either Ford or Chrysler is going to fail and die if we keep the current structure and owners.
The only hope of keeping all Big Three around is to have private equity or raiders come in, cut the fat to the bone, streamline and re-assess the business by bringing in outsiders who don’t have friends in Detroit, don’t need friends in Detroit and aren’t seeking to make friends in Detroit. If a PE fund brings in guys who get death threats from the union thugs, you’ll know that the new owners are serious about saving the companies and they’ve brought in the right guys for the job.
As things stand now, it appears that Daimler has to sell Chrysler to pacify their own domestic German labor problems, and it appears that Ford might run out of time and money before they get things turned around. We might yet see a fire sale on two of the Big Three, not just one.
I have a ‘99 300m w/115,000 miles and I love it. I’ll be sad when I have to bury it. I’m looking at getting a Crossfire.
A sales rep with a major drug company stopped by my uncle’s pharmacy with one of these turbine cars back in the mid 60s. He was swamped with scrips at the time but took 45 minutes out to drive the thing. It was amazingly quiet but not especially thrifty on fuel.
Kirk will be 90 years old this year. What is he doing trying to buy a struggling auto maker that is going to be nothing but headaches for years to come. He will be dead before the US auto industry turns around. Makes no sense to me.
well then you can brew your own. LOL
I’ve been looking at purchasing a diesel vehicle and filling it up with my own bio-diesel.
Sometimes a SINGLE voice at the top can do wonders. Harley-Davison was bought by AMF and went in the tank. It was sold to the original owners again and went ballistic. Same with Snapple. Quaker couldn’t run it but the originals could, and now do so once again. May be just what Chrysler needs, a single commander and a single motive: profit..........
It’s the pensions & retiree benefits that are HUGE costs on MOPAR.
“Chrysler makes some good machines. “
Must be mersedeses.
Ah. Kinda like Enron, eh? Pretty sad what greed does.
No, we the tax payers did.
Job security for mechanics for servicing an automobile known for "dismal quality".
I heard the union president (Ron Gettlefinger - sp?) tell Paul W. Smith of Detroit's WJR 850AM in a radio interview, "....if Chrysler dumps the union, they will strike all of the automotive industry!"
(I believe that is what he said.)
We have a Dodge RAM and a PT Cruiser. We love them!
The underlying platform is the previous generation Mercedes E-class. This is not a bad thing, at all.
An acquaintance (friend of a friend) has a 300C SRT-8. I’m pretty intrigued by that car. Heckuva car, for the money.
You’re not wrong at all:
Here’s the thing: the UAW could strike.... and achieve the most pyhrric victory in the entire history of the union movement.
What the unions seem completely incapable of understanding is that the game has changed. Gettelfinger is still living in the 90’s or 80’s, where management would cave into strike threats and cough up pay and benny packages that are unsustainable 10+ years out (as the Big Three are now finding out...)
The Big Three know that the #1 problem, bar none, is the cost of labor. The costs that are killing them are the outlandish health care and pension plans, as well as the featherbedding. There’s no way around the actuarial numbers on this; there simply have to be cuts (deep cuts) made to return the companies to a positive cash flow. This is why Ford hocked the company to the hilt to simply buy out half of the union employees. Chrysler might try the same thing, but I suspect that the UAW is now seeing the big picture for what it is — the huge buy-out at Ford, coupled with the buyouts and attrition plans at GM, have gutted the UAW. Another round of buy-outs and job cuts will leave the UAW as a toothless tiger in politics.
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