Sunday, December 03, 2006

Homewreckin' Shareholders want to split DaimlerChrysler

Filed under: Chrysler DaimlerChrysler Earnings/Financials

The "merger" at DaimlerChrysler never really came off as a good idea. We put "merger" in quotation marks because no one ever really bought it as a marriage of equals but saw it for what it always was: Daimler-Benz taking over Chrysler. Whatever way you spin it though it was never a match made in heaven. Lagging sales from Chrysler Group brands are a drain on the parent company's bottom line and the US lost one of its Big 3 independent domestic carmakers.

Now the company's biggest stockholders are asking that the American half be spun-off as a separate company. Why not sell it off? Apparently according leading investment experts at least Chrysler wouldn't find a buyer. In fact they say with billions in unfunded pensions and other workers' benefits DaimlerChyrsler would have to pay someone to take it. Ouch.

The bottom line is that none of the DaimlerChrysler brands have much expertise in the growing small-car market. Nissan/Renault does though and after failed talks with GM and Ford some financial experts have suggested that DCX should ink the deal. That'd make for one very large auto conglomerate based in the US Japan France and Germany. Think they might need a shorter name though.

[Source: Reuters via Motor Authority]

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