DETROIT: The future of the Chrysler Group could lie in the hands of private equity firms, which have reportedly held preliminary talks with the struggling automaker's parent company, Daimler-Chrysler.
Among the financially flush groups looking at the enterprise are said to be Apollo Management, Blackstone, Carlyle, and Cerberus Capital Management, as well as several European names.
Private equity groups have been circling weakened US automakers for sometime as they search for potential bargains. Cerberus took part in the acquisition of a 51% stake in the finance arm of General Motors last year, while Carlyle was part of a consortium which acquired car rental group Hertz from Ford Motor Company in 2005.
DaimlerChrysler has engaged the services of investment bankers JPMorgan Chase to examine all options for the US unit's future which, at least officially, remains unclear [WARC News: 16-Feb-07].
Indeed, the German giant is still talking about turning round Chrysler Group, while its ceo, Thomas LaSorda says: "It may take weeks or months before official comments can be made on some issues."
In an email message to workers he added: "Meanwhile, our job is very clear. Our mission is to produce great cars and trucks, to take care of our customers and to restore profitability. Whatever fork in the road we may take, we first have to make sure we're on the road — and the recovery and transformation plan is that road."
The company has already announced plans to shed 13,000 jobs, including 11,000 production workers and 2,000 white-collar staff as it trims expenses to match declining sales. It also announced the closure of one plant and layoffs at several others.
Data sourced from Financial Times online; additional content by WARC staff