The not so Big #3 being sold off.

[The Gaijin]

Walter P and the Dodge brothers must be spinning. What do you guys think about the Chrysler news?

[the]

They already were sold off, to Daimler Benz, years ago. That was the big news (it was amazing at how easy they were able to camoflauge the sale, and how quietly they were able to let it happen).

Daimler is merely unloading one of their divisions now. Yawn.

[The Gaijin]

Benz at least is a car company with some pretty good cash flow and engineering prowess. Not they have been sold to an I Bank looking to make a quick turnaround and some money out of this.

[NICKG]

inside prediction...Chrysler gets sold to chinese...after GM buys Jeep for 5 billion.

[dtw]

This will be REALLY interesting to watch. My primary client is a recently-acquired Cerberus portfolio company and it has been fascinating to see how relentlessly these guys push change. It is uncompromising. While there haven't been any layoffs here, there's also been positive cash flow a-plenty. Chrysler is already in the middle of downsizing - so I'd expect a harsher reality for them.

The biggest aspect of this for me is to see how they deal with Chryslers cash-burning cost structure - namely, the union pension/healthcare/salary issues. The concept of peaceful co-existence between entrenched UAW and private equity guys would seem to be unlikely.

Grab your popcorn!

[kaisen]

Daimler AG came out of this as well as could be expected.

Quoting Detroit News:

"Most of Cerberus's $7.4 billion payment will not go to DaimlerChrysler but to bolster Chrysler's operations, which DaimlerChrysler is transferring free of debt. The majority of the payment will be invested in Chrysler's industrial business, while slightly over $1 billion has been earmarked for the financial services activities, DaimlerChrysler said.

The German automaker will receive the remaining $1.3 billion in a transaction expected to result in a net cash outflow of around $650 million by the Stuttgart, Germany-based automaker. "

[Porsche virgin]

Originally posted by NICKG
inside prediction...Chrysler gets sold to chinese...

I agree. I'm surprised one of the Chinese manufacturers didn't make a play for it in the first place. It would be a perfect way for them to break into the US market and they could use their cheap labor to lower Chrysler's cost structure.

[cashflyer]

Originally posted by Porsche virgin
...and they could use their cheap labor to lower Chrysler's cost structure.

IIRC, I read that the UAW contracts prevent the company from subcontracting to or purchasing parts from non-union factories.

[NICKG]

Originally posted by cashflyer
IIRC, I read that the UAW contracts prevent the company from subcontracting to or purchasing parts from non-union factories.

their contracts are no longer valid...they have new owners. The new owners are RUTHLESS, The UAW has got to be crapping themselves over it already. They are not there to be nice, just make $$$ so they are gonna do what they need to, not what any bully union say to like the traditional automakers did.

watch for agressive plant closures and massive layoffs as it goes along. gm will likely get Jeep in a month or so, then the chinese will be coming. it will happen fast especially if the union doesn't let drastic cost cutting thru. I would not be surprised to see the entire workforce let go and then rehired as temps as they transfer the factories to china.
You have to know that they could just close the company down, work on the huge inventory that they have (almost seems like that was the plan now) until the plants are up and going in china or mexico...

[widgeon13]

Hell of a return on an investment of 36 BILLION. (sorry to shout)

[the]

That doesn't include the BILLIONS that Chrysler bled from Daimler in losses during the time it was owned by Daimler.

At one point, Daimler's Chrysler division was losing Billions per QUARTER. Really think about how much that is - we throw around billion so easily these days, but it is a thousand millions. And a quarter is only three months. It's mind-blowing how bad Chrysler was for Daimler.

Hopefully by getting rid of that dog, Daimler can focus again on building quality cars. For whatever reason, maybe coincidence, the crappiest, lowest quality, least reliable Mercedes cars were built during the "DaimlerChrysler" era. Hopefully that era is now over.

[widgeon13]

Yes, that's correct. I didn't want to add insult to injury.

What a circle jerk

[lendaddy]

There will also be little pro union backlash from the public against a faceless owner like Cerberus. They can be complate hardasses without fear of ruining their image(cause they don't have one). This may work very well.

[dd74]

Originally posted by the
That doesn't include the BILLIONS that Chrysler bled from Daimler in losses during the time it was owned by Daimler.

Hopefully by getting rid of that dog, Daimler can focus again on building quality cars. For whatever reason, maybe coincidence, the crappiest, lowest quality, least reliable Mercedes cars were built during the "DaimlerChrysler" era. Hopefully that era is now over.

From what I recall, the Crossfire, 300 and a few other Chrysler products were built with M-B running gear. Dr. Z.'s TV commercials last year even bolstered this fact, IIRC. So if what Daimler produced were the "crappiest, lowest quality, least reliable Mercedes cars" during the D-C era, it isn't entirely Chrysler's fault as M-B fed some of its engineering directly into the Chrysler bloodstream.

Apart from that, Mercedes started producing less-than-stellar cars far before the Daimler-Chrysler merger. The first C class car in the mid-80s was, IMV, the point when the company began to drift from its tradition of reliable products.

Sure, the design of the Chrysler cars are dated, and a big-assed Hemi V8 isn't vogue in these Hybrid days. However, I agree this merger divorce is more about employee health care costs, which are something like $2 billion a year for Chrysler, and UAW constraints that have Daimler finally throwing in the towel.

[the]

Originally posted by dd74
From what I recall, the Crossfire, 300 and a few other Chrysler products were built with M-B running gear. Dr. Z.'s TV commercials last year even bolstered this fact, IIRC. So if what Daimler produced were the "crappiest, lowest quality, least reliable Mercedes cars" during the D-C era, it isn't entirely Chrysler's fault as M-B fed some of its engineering directly into the Chrysler bloodstream.

The MB parts used in chrysler cars didn't have any effect on the quality of the Mercedes cars.

As far as I know, no Chrysler parts were ever used on Mercedes car. Parts only flowed the other direction. So while Mercedes directly affected a few of the Chrysler products, the opposite was not true.

That's why I said "For whatever reason, maybe coincidence, the crappiest, lowest quality, least reliable Mercedes cars were built during the DaimlerChrysler era." I don't see how the Chrysler acquisition directly affected the quality of MB cars during this era. Maybe it was just coincidence, but it is true that the crappiest, lowest quality, least reliable Mercedes cars were built during the DaimlerChrysler era.

(BTW, I disagree that the first of the C class cars were the beginning of the problem. The first C class cars were built fine and are pretty solid cars. The problems REALLY started in full force with the W203 C class, which was the new body style introduced for the 2001 model year. The warranty work that Mercedes was required to do on those cars, and most of the other Mercedes models during the early 2000s, was staggering and cost the company a tremendous and unprecedented amount of money.)

[David]

Originally posted by NICKG
their contracts are no longer valid...they have new owners. The new owners are RUTHLESS, The UAW has got to be crapping themselves over it already. They are not there to be nice, just make $$$ so they are gonna do what they need to, not what any bully union say to like the traditional automakers did.

It's my understanding that when the whole company is sold, the contract goes to the new owner.

The question is: "Is Chrysler a company or an asset of MB?"

[the]

Originally posted by 125shifter

The question is: "Is Chrysler a company or an asset of MB?"

It's both (other than your misuse of MB in place of Daimler).

It's a company, and it's also an asset of Daimler AG.

[dd74]

Originally posted by the
The MB parts used in chrysler cars didn't have any effect on the quality of the Mercedes cars.

As far as I know, no Chrysler parts were ever used on Mercedes car. Parts only flowed the other direction. So while Mercedes directly affected a few of the Chrysler products, the opposite was not true.

That's why I said "For whatever reason, maybe coincidence, the crappiest, lowest quality, least reliable Mercedes cars were built during the DaimlerChrysler era." I don't see how the Chrysler acquisition directly affected the quality of MB cars during this era. Maybe it was just coincidence, but it is true that the crappiest, lowest quality, least reliable Mercedes cars were built during the DaimlerChrysler era.

(BTW, I disagree that the first of the C class cars were the beginning of the problem. The first C class cars were built fine and are pretty solid cars. The problems REALLY started in full force with the W203 C class, which was the new body style introduced for the 2001 model year. The warranty work that Mercedes was required to do on those cars, and most of the other Mercedes models during the early 2000s, was staggering and cost the company a tremendous and unprecedented amount of money.)

So, in short, the crap M-B has built can be blamed on M-B itself. Or, are you suggesting M-B use Chrysler as a scapegoat for their, as of late, poor quality?

BTW: the first line of C-Class M-Bs were rated lowest in consumer crash safety standards for their class. Solid, they evidentially were not.

[legion]

Originally posted by dd74
BTW: the first line of C-Class M-Bs were rated lowest in consumer crash safety standards for their class. Solid, they evidentially were not.

That doesn't surpise me. In order to do well in crash tests, you need a car that falls apart (dissipates energy). A car with a very rigid frame will do poorly. When I had my 300D, I got into a conversation with another 300D owner at the mechanic. She had rear-ended another vehicle at 30mph. She broke both of her legs. The car suffered $500 in damage. The car transferred all of the energy from the impact to her while sustaining very little damage itself.

I challenge you to find any new car that would not be totalled by a 30 mph collision--front, rear, or sides.

[dd74]

Originally posted by legion
That doesn't surpise me. In order to do well in crash tests, you need a car that falls apart (dissipates energy).

Even so, and whether or not cars then dissipated energy, compared to similar cars using similar safety guidelines as the small Mercedes, the C-Class still came in last place. This was, IIRC, in the late '80s. There were a few other tests in which I recall it failing outright.

I remember being very surprised by this as M-B had at that time been always noted for safety.