Two German newspapers, Handelsblatt and Frankfurter Allgemeine Zeitung, reported this morning that DaimlerChrysler's CEO Dieter Zetsche will say later today at a news conference that he is considering a partial or complete sale of its North American arm Chrysler. Zetsche has contracted a U.S. investment bank to investigate different possibilities for its U.S. unit, Handelsblatt said. "Everything is possible... [and it's] more likely that something drastic will happen than that nothing will happen," said someone familiar with the matter. The paper added that possible options include forming a global alliance with a competitor or floating its shares on the NYSE. In October CFO Bodo Uebber dodged questions about the spinoff idea during a conference call, and DaimlerChrysler later issued a written statement denying any intention to sell Chrysler. In a German television interview today, WGZ Bank equity strategist Manuel Martin commented, "It will be difficult for DaimlerChrysler to achieve the turnaround at Chrysler... The models Chrysler offers guzzle too much gasoline. They would have to replace the whole product platform, but that takes time. Splitting it off would be a costly exercise. Another option would be to sell it, but what investors would be interested?" DaimlerChrysler is due to announce its restructuring plans for Chrysler, dubbed Project X, today, including cutting up to 10,000 jobs and closing two North American plants. Update: In a brief statement to the German Stock Exchange, DaimlerChrysler said its management team will consider "far-reaching strategic options with partners," and that, "No option is being excluded in the interest of arriving at the best possible solution for the Chrysler Group and DaimlerChrysler as a whole." A Renault spokeswoman said the company had no comment on the statement: Renault currently has an alliance with Nissan, and last week CEO Carlos Ghosn said a North American alliance partner would be valuable.
Sources: Reuters/New York Times, Wall Street Journal, Bloomberg, MarketWatch I, II
Commentary: New Direction for DaimlerChrysler? • Project X: Chrysler's Bold Revitalization Plan • Chrysler's Woes Continue To Weigh on DaimlerChrysler Stock
Stocks/ETFs to watch: DaimlerChrysler (DCX). Competitors: General Motors Corp. (GM), Ford Motor Co. (F), Toyota Motor Corp. (TM), Honda Motor Co. (HMC), Nissan Motor Company Ltd. (OTCPK:NSANY). ETFs: iShares Dow Jones Transportation Index ETF (IYT)
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