DaimlerChrysler ‘divorce’ likely

first_img“What will happen if you do not find a new bridegroom for Chrysler, or if the dowry is too high?” Gebhardt said. Hans-Richard Schmitz, a spokesman for the German Association for the Protection of Shareholders, said, “This marriage made in heaven turned out to be a complete failure.” Schmitz criticized DaimlerChrysler’s management for even reserving the option of not selling the unit. “What’s missing now is a swift resolution of the issue by the management of the group,” he said. “I don’t understand why you’re so hesitant, Dr. Zetsche.” Among the shareholder proposals that were scheduled to be put to a vote later Wednesday was one that would require DaimlerChrysler to change its name back to Daimler-Benz if it does not unload Chrysler by March 31, 2008. “Maintaining a corporate name that evokes associations with the failure of the business combination with Chrysler is detrimental to the image of the corporation and its products,” said the proposal, submitted by two shareholders, Ekkehard Wenger and Leonhard Knoll. The company said the DaimlerChrysler name was well established, and urged shareholders to reject the proposal. So far, three parties have submitted expressions of interest in Chrysler, according to people involved in the negotiations: two private-equity firms – Blackstone Group and Cerberus and the Canadian auto-parts supplier, Magna International, which is working with another private equity investor, Ripplewood.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! But it added to the momentum that is building behind a sale. DaimlerChrysler’s shares rose nearly 1 percent Wednesday morning, on top of a roughly 25 percent rise in the stock since the company put Chrysler into play. The mood among the 8,000 or so shareholders assembled for the company’s annual shareholders’ meeting was unmistakable: They expect DaimlerChrysler to cut loose Chrysler, unwinding a trans-Atlantic merger that was hailed at the time of its announcement in 1998 as a blueprint for the future of the global auto industry. A steady stream of investors stood up during the meeting to condemn the merger and demand a speedy sale. “Should there be a divorce in court, we would be very happy,” said Henning Gebhardt, a spokesman for DWS, a major German asset management firm. His fear, he said, was that DaimlerChrysler would not find a buyer willing to take Chrysler off its hands on acceptable terms. With some $20 billion in health-care obligations for retired workers, Chrysler will not be easy to sell, according to analysts. Some estimate it may fetch as little as $5 billion to $7 billion – or even nothing. BERLIN – DaimlerChrysler confirmed for the first time Wednesday that it is in negotiations with a number of parties about the sale of its money-losing Chrysler division. Speaking at DaimlerChrysler’s annual meeting here, Dieter Zetsche, the chief executive, said, “I can confirm that we are talking with some of the potential partners who have shown a clear interest.” Zetsche did not identify the automaker’s suitors, nor did he guarantee that the talks would end in the sale of Chrysler. “We need to keep all options open,” he said. “We need to keep maximum scope to maneuver.” DaimlerChrysler’s confirmation was not a surprise. The auto industry has crackled with rumors about would-be bidders for Chrysler since mid-February, when Zetsche disclosed that the company was considering all options for the unit, which lost $1.5 billion last year. last_img read more