Daimler-Benz plans to sell Chrysler. This might help explain why.
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Zifnab
How… how do you sell a company that’s worth negative money? How does that work? Who would buy it?
stickler
Who would buy it? Whomever you pay to take it off your hands, that’s who.
But I still don’t think Zetsche will sell Mopar. Their product mix is too dependent on Benz technology, and anyhow it was just a couple of years ago that Chrysler North America was earning all the profits while Benz was in the crapper.
I’m convinced that this is all an elaborate ploy to scare the crap out of the UAW so the upcoming negotiations go easier for the company.
LLeo
Google invested money in AOL (not TWX as a whole). $1 billion for %5 which lays down a valuation of $20 billion.
FWIW, I used to work for AOL. It is in a death spiral. Operations, which used to be the rock that the rest could lean on, is corroding from realy realy bad managemnet.
On the otherhand, AOL has alot of valuable assets. Most people don’t know you are hitting an AOL site. TMZ.com, WebMD, MapQuest are just a few that most people don’t realize are AOL.
I wish them the best, but I wouldn’t be suprised to see high profile failures of AIM or AOL Mail (both of which used to be rock solid).
Kimmitt
It’s not worth negative money; Daimler-Benz gets the cash for selling Chrysler, and that’s part of its new valuation. The idea is that the conflicting cultures are holding Daimler-Benz back from its true capacity, so it would run more smoothly if separated.
Walker
What really sucks is that, as a Jeep owner, I liked the Daimler-Chrysler buy out. You don’t understand how much Chrysler cars have improved because of the buy out. My Jeep Liberty (which has Mercedes parts) is head and shoulders above any Jeep I have previously owned.
MNPundit
It’s too bad. When Chrysler got bought I had hoped that they would instill some European style low-level emissions and high mileage instead of the god-awful monsters American companies make.
Well maybe they’ll sell it to an Asian manufacturer.
demimondian
It’s not uncommon for a conglomerate to sell a division and see its stock price rise sharply. If shareholders believe that a division is growing more slowly than the rest of the conglomerate *and* that the cash made available by the sale would yield at a rate comparable to the faster growing divisions of the larger company after the sale, then there’s every reason for the stock price to rise.
In this case, Chrysler is currently lagging — its primary products, vans and light and heavy trucks, are performing poorly throughout the US market, and, since it really doesn’t have a small-car division to fall back upon, the division as a whole is suffering.
You can’t conclude that Chrysler had negative value because DCX would be worth more w/out Chrysler.
Tulkinghorn
They could always spin Chrysler out to the stockholders, and let it sit as a takeover target for the next Al Dunlop.
stickler
Tulkinghorn, sorry:
Chrysler alone — given its gi-normous pension and health care costs — is a takeover target for no one save the Grim Reaper. Even if you part out Jeep and the trucks.
Now if, by some miracle, we get national health insurance of some sort, and gas goes back to, say, $2.25 a gallon (or God be praised, $1.50!), then Chrysler is poised for a blazing comeback.
And I’d like to have my pony delivered on Friday.