Thursday, May 10, 2007

An overview of Chrysler Group's suitors, options

DaimlerChrysler AG is not talking about the companies supposedly interested in buying the Chrysler Group. But here is the state of industry thinking:


Potential investors

• Magna International Inc. and Onex Corp.: The Canadian team of auto-parts supplier and investment company is considered the front-runner by a KeyBanc Capital Markets analyst, and a German industry newspaper has said the group is the lone serious bidder. The Canadian Auto Workers union prefers this tandem over the other bidders.

• Cerberus Capital Management: A private equity firm that might hold an edge with some Chrysler workers, having hired former Chrysler Chief Operating Officer Wolfgang Bernhard, who helped orchestrate the automaker's previous turnaround along with current DaimlerChrysler Chairman Dieter Zetsche. Bernhard has been seen recently at Chrysler headquarters in Auburn Hills.

• Blackstone Group: A private equity firm with experience in the auto industry. Some experts say Blackstone's offer might be helped by the fact that because so little is known of its bid, plans or leadership team, no one has anything to criticize.

• Kirk Kerkorian: The billionaire's investment company Tracinda Corp. has made its $4.5-billion bid public. but it supposedly was not looked upon favorably, in part because of Kerkorian's contentious history with DaimlerChrysler. In the 1990s, he attempted to buy Chrysler but failed. Some experts have praised Tracinda's idea of giving the UAW an ownership stake in Chrysler in exchange for health-care concessions, an idea they expect others to follow.

• Employee Ownership Committee: The group of hourly workers from Toledo appears to be a long shot. It says its offer is not taken seriously.

• General Motors Corp.: The Detroit automaker was one of the first names to emerge as an interested party. The crosstown rival had talks with DaimlerChrysler about a potential deal that effectively would have GM taking Chrysler off Daimler's hands. Talks fell to the side when DaimlerChrysler sought a better deal on the open market.

Wild cards


• The UAW: Union President Ron Gettelfinger has made his position clear: DaimlerChrysler should stay together. Whenever he speaks publicly about the issue, that's what Gettelfinger says. His office, meanwhile, has received numerous telephone calls from prospective buyers seeking support.

• Long-term liabilities: Analysts estimate the long-term value of promised health-care and pension benefits to Chrysler employees at $16.5 billion to $19.2 billion. Who pays for these and how?

• Option to keep: Zetsche and other DaimlerChrysler officials have said repeatedly that "all options are on the table." By definition, that would include the option not to sell Chrysler.

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