DaimlerChrysler CEO Tommy LaSorda reassured Florida dealers yesterday that talks to sell its Chrysler division to a private equity contender -- purportedly either Cerberus Capital, a Blackstone Group/Centerbridge partnership, or Canadian auto parts maker Magna International -- are advancing quickly. He hopes to report decisively on a sale or turnaround effort at the April 4 shareholders meeting. LaSorda indicated that Mercedes and Chrysler would maintain ties regardless, such as in current joint purchasing for volume discounts, and collaboration on technology, and engineering & design. The hybrid engine partnership is particularly potentially lucrative, with Washington offering fuel efficiency incentives. DaimlerChrysler is selling off assets like Detroit's American Axle Manufacturing, and executives say that inventory is now aligned with dealers' needs in response to last years overproduction. But a potential Chrysler sale is shadowed by 8% lower sales this year, and job cuts. Missouri lost 1900 Chrysler jobs this week, and 13,000 firings are planned nationwide. A buyout will also be hampered by Chrysler's UAW union's high wage & benefit agreements, and bloated retiree pensions.
Sources: Wall Street Journal, Detroit Free Press I, II, III, IV , St. Louis Business Journal, Press Telegram, Akron Beacon Journal
Commentary: The Rise of Toyota and the Demise of the American Auto Industry • The Dating Game: Magna Likes Chrysler • Daimler-Chrysler: Does Divorce Really Loom? - Barron's
Stocks/ETFs to watch: DaimlerChrysler (DCX), Magna International (MGA), Ford Motor Co. (F), General Motors Co. (GM), Toyota Motor Corp. (TM), Honda Motor Co. (HMC)
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