Chrysler on the block?
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Chrysler on the block?
I can't even imagine the turmoil if someone from China bought them out.
Wall Street Hails Potential Sale
Feb 15, 2007
Detroit News
Wall Street cheered DaimlerChrysler AG's restructuring plan for its struggling Chrysler unit Wednesday, sending the Germany-based company's stock price soaring.
The investment community reacted positively to DaimlerChrysler's statement that it would explore strategic options for Chrysler and did not rule out a sale.
The company's stock rose 8.3 percent to $69.78 Wednesday in heavy trading on the New York Stock Exchange, its highest level since January 2000. The surge raised DaimlerChrysler's market value $5.4 billion.
DaimlerChrysler has retained J.P Morgan & Co. to explore strategic options, according to company sources.
Chrysler said it would cut 11,000 factory jobs and 2,000 salaried positions in the next two years, or about 16 percent of its 82,500-member work force, as part of a broad plan to restore profits by 2008.
The restructuring moves will result in an accounting charge of about $1.3 billion in 2007 as it offers buyouts to shed jobs.
Ron Tadross, a Bank of America auto analyst, sent out a research note Wednesday titled "Chrysler on the Table." He said without Chrysler, DaimlerChrysler would be worth more than $80 a share -- or 15 percent more than today.
"We would not be surprised if there is good interest in Chrysler. We see Chrysler as a decent business, at least relative to the other U.S. domestic manufacturers," Tadross wrote, saying the targeted savings from restructuring were higher than expected, though he said a spinoff "did not make strategic sense."
John Casesa, managing partner at New York-based Casesa Strategic Advisors, said the Chrysler unit could draw interest from Nissan/Renault or even a Chinese automaker.
"The news clearly is the change in view on ownership of Chrysler. Sooner or later they have to decide whether to fully integrated Chrysler or separate altogether," he said. "They opened the door for all options."
Overall, DaimlerChrysler reported a 2006 operating profit of $7.3 billion in 2006, up from $6.8 billion in 2005, as its Chrysler Group suffered a $1.5 billion on lower revenues.
Mercedes made $3.2 billion in profits as it rebounded from a $666 million 2005 loss, while its truck group earned $2.7 billion.
Some analysts noted that in 2005 -- the year Mercedes struggled -- Chrysler Group posted a $1.8 billion profit.
The German-American auto company sold 4.7 million vehicles in 2006, down from 4.8 million in 2005 as a result of a 100,000 vehicle decrease at Chrysler, while the group's total revenues increased 1 percent to $200.1 billion.
Wall Street Hails Potential Sale
Feb 15, 2007
Detroit News
Wall Street cheered DaimlerChrysler AG's restructuring plan for its struggling Chrysler unit Wednesday, sending the Germany-based company's stock price soaring.
The investment community reacted positively to DaimlerChrysler's statement that it would explore strategic options for Chrysler and did not rule out a sale.
The company's stock rose 8.3 percent to $69.78 Wednesday in heavy trading on the New York Stock Exchange, its highest level since January 2000. The surge raised DaimlerChrysler's market value $5.4 billion.
DaimlerChrysler has retained J.P Morgan & Co. to explore strategic options, according to company sources.
Chrysler said it would cut 11,000 factory jobs and 2,000 salaried positions in the next two years, or about 16 percent of its 82,500-member work force, as part of a broad plan to restore profits by 2008.
The restructuring moves will result in an accounting charge of about $1.3 billion in 2007 as it offers buyouts to shed jobs.
Ron Tadross, a Bank of America auto analyst, sent out a research note Wednesday titled "Chrysler on the Table." He said without Chrysler, DaimlerChrysler would be worth more than $80 a share -- or 15 percent more than today.
"We would not be surprised if there is good interest in Chrysler. We see Chrysler as a decent business, at least relative to the other U.S. domestic manufacturers," Tadross wrote, saying the targeted savings from restructuring were higher than expected, though he said a spinoff "did not make strategic sense."
John Casesa, managing partner at New York-based Casesa Strategic Advisors, said the Chrysler unit could draw interest from Nissan/Renault or even a Chinese automaker.
"The news clearly is the change in view on ownership of Chrysler. Sooner or later they have to decide whether to fully integrated Chrysler or separate altogether," he said. "They opened the door for all options."
Overall, DaimlerChrysler reported a 2006 operating profit of $7.3 billion in 2006, up from $6.8 billion in 2005, as its Chrysler Group suffered a $1.5 billion on lower revenues.
Mercedes made $3.2 billion in profits as it rebounded from a $666 million 2005 loss, while its truck group earned $2.7 billion.
Some analysts noted that in 2005 -- the year Mercedes struggled -- Chrysler Group posted a $1.8 billion profit.
The German-American auto company sold 4.7 million vehicles in 2006, down from 4.8 million in 2005 as a result of a 100,000 vehicle decrease at Chrysler, while the group's total revenues increased 1 percent to $200.1 billion.