Posted on 05/14/2007 11:22:44 AM PDT by MinorityRepublican
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 essentially pay to dump the money-losing Chrysler unit which it paid $37 billion for nine years ago.
DaimlerChrysler (Charts) announced it will sell an 80 percent stake in its U.S. brand to Cerberus Capital Management, a private equity investment firm that will pay $7.4 billion.
But the German automaker, which will be renamed simply Daimler, will not actually get most of the money that Cerberus is paying for the once proud automaker. Instead Cerberus will contribute $5 billion to the Chrysler auto operations it will now control, with just over another $1 billion going to Chrysler's finance arm.
While Daimler will receive the remaining $1.4 billion of Cerberus' capital contribution to the sale, Daimler expects to have to cover another $1.6 billion in Chrysler losses before the deal closes. So Daimler estimates that it will end up paying out about $650 million to close the deal, and that its earnings for 2007 will take a $4 billion to $5.4 billion profit hit due to charges related to the transaction.
(Excerpt) Read more at money.cnn.com ...
Chrysler wound up being sold anyway. Had the Feds not given them guarantees, they would have been swallowed up by GM, or a foreign manufacturer, more likely the former.
Actually, I agree with you. It’s just hard to argue with success.
My dad was in the auto industry for thirty years. From his POV, it was inconsistent management (new managerial “fads” every six months at the big three are all too common place), to say nothing of the “buying off” of the labor force that could not be prolonged in the face of longer lifespans among the boomer generation.
> Only because of the POS trial lawyer driving it.
That would have been... Ralph Nader. Now whatever happened to him?
The Cordoba...
“I like what they’ve done to my car.”
lol!
I'd forgotten about that line.
I think they made sandals out of old Corvair tires.
Hopefully they won’t just gut it and sell off the parts to the highest bidder. While Chryslers quality control issues are as old as the company itself, it would be a shame to see it die... I can’t personally see that, but you never know.
“ladling all their ills on the Americans when it was Chrysler’s profits that propped up Mercedes for most of the 9 years they were together”
A fact missed by 90+% of the press and people around boards like this. Chrysler is losing money now and Mercedes making a little, but most of the time it was Mercedes hemorraging cash and Chrysler propping it up. That’s gratitude.
Same thing is happening at Ford, really - for many years, Ford of Europe was the pits, turning in consistent $600 million operating losses while North America propped up the business. Now North America is turning in $600 million operating losses and getting subsidized by hefty profits from Europe, South America, and Mazda.
At least they learned their lesson.
I know someone who replaced the transmission in their Honda Odyssey 3 times (Honda has had some major problems). Yet when their 13 year old Taurus needed an idler pulley changed (no other repairs), they cursed the Ford and bought another Honda because they “wanted something reliable”.
Go figure.
“I owned ford f100 which turned to be a pos”
Good grief... they haven’t made those in about 25 years! :)
the evil Dr. Z must be involved somehow!
For your own safety, go with a Toyota Sienna if you want a minivan. Its the ONLY one I recommend.
Honda has had horrid transmission problems with the Odyssey in recent years, and Nissan hasn’t exactly been stellar either - they’re rated well below Ford by Consumer Reports, JD Power, and Warranty Direct, among others.
Truedelta.com has the Sienna as the MOST reliable vehicle of all they survey (limited sample of about 30 vehicles) - well ahead of the Odyssey.
Perceptions don’t necessarily equate to reality. JD Power’s top 5 most reliable midsize sedans (reliability, not initial quality) might shock some people:
1) Buick Century, 2) Buick Regal, 3) Mercury Sable, 4) Toyota Camry, 5) Ford Taurus.
Actually, the government made a profit on those loans.
My impression, confirmed by the article that you linked, is that Mercedes’ quality problem hit bottom a few years back - early ‘00s.
It had been building for a long time. Our 1991 300E, with nearly 200,000, is still running great. But my 1996 S-Class, although a fun drive, would have been very, very expensive if I hadn’t purchased the extended warranty. I let it go at lease-end. I think I’ve bought the only early M-Class (2001) that wasn’t a lemon - and pretty much by the late ‘90s, things, quality-wise, were a wreck with Mercedes, which dramatically changed for the worse the way the dealers operated, too.
Things have been getting better, or so I’m told, but the loss of confidence that Mercedes owners once had is real and could be long-lasting.
sitetest
Ralph? Is that really you? Imagine finding Ralph Nader on FR!
The fact is that the Corvair was deliberately trashed by Ralphie Pooh. Who, by the way, owned quite a collection of Corvairs.
Think of that socialism impaired writer as a male Rachel Carson. He set Detroit on a path away from small cars, which, as he and his fellow socialists wanted, led to US loss of domination of the auto industry.
Carson wanted to ban a known safe pesticide. She is directly responsible for the deaths of nearly as many people as Communism was. For those not counting the Communism kills, it at least ohe hundred million corpses.
Bad Rachel! BAD, BAAD Rachel!
Had one as a lease while my Acura was being repaired from a rear-ender. The PT wasn't too bad, except buzzy during acceleration, and sucked more gas around town than my 98 F150!
You’re Right! It was still a pos.
Bullfrog
It actually kind of figures that a guy who doesn’t drive would own a collection of cars that can’t be driven. Last I knew, Ralphie took the bus.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.