| Magnitude | 4.7 |
|---|---|
| Date-Time | = Coordinated Universal Time = local time at epicenter |
| Location | 38.428°N, 119.367°W |
| Depth | 10.4 km (6.5 miles) |
| Region | CENTRAL CALIFORNIA |
| Distances | |
| Location Uncertainty | horizontal +/- 0.2 km (0.1 miles); depth +/- 1.3 km (0.8 miles) |
| Parameters | Nst=250, Nph=250, Dmin=11 km, Rmss=0.08 sec, Gp=119°, M-type=regional moment magnitude (Mw), Version=3 |
| Source | |
| Event ID | nc51179422 |
Frank Stronach says it's vital that Magna International Inc. participate in the potential sale of the Chrysler Group in order to protect itself and assist its largest customer.
“We have huge contracts with Chrysler, we have thousands of employees involved,” Mr. Stronach told The Globe and Mail Thursday. “It's very important that we have a total understanding of what it is all about.”
The statements are Mr. Stronach's first public comments on the situation since DaimlerChrysler AG chairman Dieter Zetsche announced on Feb. 14 that all options for the future of the Chrysler Group are under consideration.
Since then, Mr. Stronach has met with Mr. Zetsche and the presidents of the Canadian Auto Workers and United Auto Workers unions to discuss the future of the No. 3 Detroit-based auto maker.
During the next few days, Magna officials will receive a presentation from Chrysler officials in Auburn Hills, Mich., the Magna chairman said. News reports in Detroit have indicated that private equity firms Cerberus Capital Management LP and Blackstone Group LP have already received presentations from senior Chrysler officials at the auto maker's head office operations, north of Detroit.
“At this time, in order to know where everything stands, we naturally have to take a look at the facts and the data,” Mr. Stronach said. “Where it will go, nobody can predict. Our predicament will be we do not want to compete with our customers.”
Magna, ranked in the top three auto parts makers by revenue, generates about 25 per cent of its more than $20-billion (U.S.) in annual sales from DaimlerChrysler. Roughly half of that amount comes from sales to Chrysler Group.
The auto parts giant's relationship with Chrysler is the deepest of all the links it has with its customers, which include most of the world's auto makers. It manufactures minivans, Jeep Grand Cherokees and Chrysler 300 cars at its MagnaSteyr operations in Europe.
A paint shop at one of Chrysler's plants in Toledo, Ohio, is owned and operated by Magna. The Canadian company assembles seating systems, bumper covers, steel body stampings and numerous other parts that go into Chrysler vehicles assembled in North America.
Mr. Stronach said it's too early to tell if Magna will need to go as far as a takeover of all of Chrysler's operations.
He also hedged on whether he would be willing to set aside his strong resistance to debt.
“There's two parts to it,” he said. “Does it make economic sense and, in our case, it's also we do not want to compete with customers.”
But he reiterated that there is much at stake for the company he founded and its more than 80,000 employees around the world.
“You might say we have a fiduciary duty to our employees to take a look and see [if] can we find solutions,” he said. “Can we be of assistance to the car industry?”
The future of Chrysler was thrown up in the air after Mr. Zetsche abandoned the parent company's stout defence of the 1998 merger between Daimler-Benz AG and Chrysler Corp. that was touted at the time as an automotive marriage made in heaven.
Mr. Zetsche was chief executive of Chrysler during a company restructuring earlier in the decade.
His plan to examine all options for the future of Chrysler was made public on the same day that the division announced another restructuring plan that involves slashing 13,000 jobs in North America and closing one assembly plant.
The shakeup came after Chrysler reported an operating loss of $1.5-billion last year as it got sideswiped by the steep and swift rise in gasoline prices that slammed sales of sport utility vehicles and pickup trucks, which represent about three-quarters of its vehicle sales.
Associated Press | By MATT MOORE 03.09.07, 4:33 AM - - ETA weaker dollar and major delays at its Airbus unit dragged annual profit down at EADS, the company said Friday, as it posted a multimillion-euro (-dollar) quarterly loss and warned that Airbus would display another substantial loss in 2007.
EADS NV lost euro768 million ($1.01 billion) in the fourth quarter, compared with a profit of euro405 million a year earlier. Sales during the quarter, however, were up 11 percent to euro11.96 billion ($15.73 billion), from euro10.76 billion in 2005.
Shares of EADS fell 2.9 percent to euro23.01 ($30.26) in opening trading in Paris, and initial reaction was negative.
"We do not think these results are OK," ABN Amro said in a research note to investors.
The European Aeronautic Defence & Space Co. said the effects of a series of management and financial crises, including a two-year delay to the double-decker A380 superjumbo that has wiped more than euro5 billion ($6.58 billion) off profit forecasts, and charges at its A350 XWB program hurt fourth-quarter profits.
Adding to that were higher research and development costs, the company said.
Officially launched in December, the euro11.6 billion ($15.26 billion) A350 XWB program promises better fuel efficiency and greater use of composites than the earlier version of the plane, but with later availability.
So far, Finnair PLC has agreed to order nine of the planes, and Airbus is in talks with other airlines about converting 93 outstanding A350 orders for the widebody model.
But the new Airbus jet is five years behind its rival, Boeing Co.'s 787 "Dreamliner," which already has notched up 464 firm orders as the U.S. company prepares to begin building the plane in the second quarter, with the first flight scheduled for August.
Airbus posted a fourth-quarter operating loss of euro1.72 billion ($2.26 billion) compared with a euro453 million operating profit in the same period a year ago. During the fourth quarter EADS bought BAE Systems PLC's 20 percent stake in Airbus for euro2.75 billion ($3.62 billion).
Sales rose 8 percent to euro6.6 billion ($8.68 billion) compared with euro6.14 billion in the fourth quarter of 2005.
For the year, Airbus, based in Toulouse, France, had an operating loss of euro572 million ($752.3 million) compared with a profit of euro2.3 billion in 2005. Sales rose 14 percent to euro25.2 billion ($33.14 billion), compared with euro22.2 billion in 2005.
New orders for planes reached 790 in 2006, compared to Boeing's 1,044.
Overall, EADS earned euro99 million ($130.2 million) in 2006 compared with euro1.67 billion in 2005. Analysts polled by Dow Jones Newswires had expected a 2006 net profit of euro39 million ($51.29 million).
Sales rose 15 percent to euro39.4 billion ($51.82 billion) from euro34.2 billion a year earlier, helped by an increase in Airbus airplane deliveries to 434 from 378 a year ago.
Co-chief executives Tom Enders and Louis Gallois said the results were hampered by Airbus, but predicted the recently announced Power8 restructuring plan would help return the unit to profitability.
"It will take some time, but Power8 will make Airbus substantially more integrated and efficient," the pair said in a statement. "For 2007, our priorities are to drive operational improvements, restore the group's credibility and build a leaner and more dynamic EADS."
Airbus plans to cut 10,000 jobs and spin off or close six of its European manufacturing plants under the auspices of the Power8 plan, which was unveiled Feb. 28.
Three sites making wing and fuselage parts in Britain, France and Germany are earmarked for sale to new investment partners as Airbus follows in Boeing's footsteps by seeking risk-sharing partners to finance more of its programs.
Airbus has said potential investment partners include Britain's GKN PLC, Italy's Finmeccanica SpA and U.S.-based Spirit AeroSystems Holdings Inc. - a former Boeing division that was renamed after its sale to investment firm Onex and remains a major Boeing supplier.
The plan has caused political disagreement between Germany and France, with the German government endorsing Power8 as a chance to make the planemaker more competitive, and French politicians looking for ways to circumvent job losses.
Before France's April 22-May 6 two-round presidential election, most candidates have pushed for state intervention to help rescue the company from its troubles.
The French government currently owns 15 percent of EADS, while Paris-based Lagardere SCA owns 7.5 percent. Their combined stake is balanced by German-American automaker DaimlerChrysler AG, which holds 22.5 percent of voting rights in the defense group.
Looking ahead this year, the company said it expected to post a single-digit increase in revenue, and said Airbus revenues would likely remain stable based on an expected 440 to 450 deliveries this year.
GREG KEENAN | Globe and Mail Update
Chrysler Group is threatening to scrap a $700-million future investment at its Brampton, Ont., plant, union officials say, in the latest example of how the sweeping restructuring of the North American auto industry is forcing workers and their unions to make difficult choices.
Chrysler Group, the U.S. division of DaimlerChrysler AG, has told the Canadian Auto Workers that a plan to add a new model in Brampton later in the decade won't go ahead unless workers at the plant reverse a decision they made last month and approve contract changes that will cut their pay, CAW officials said. Not only that, they said, Chrysler told them it will retool a U.S. plant to assemble the vehicles now made in Brampton unless the workers change their minds.
“It's hardball,” said CAW president Buzz Hargrove. “It's probably the hardest we've seen.”
The auto maker has been negotiating with the union on what it has been calling “Project X,” which would increase output in Brampton by between 40,000 and 50,000 vehicles annually and maintain the plant on three full shifts, said Bob Chernecki, an assistant to Mr. Hargrove who has responsibility for the union's dealings with Chrysler.
Industry sources said the vehicle in question is likely the Chrysler Imperial, a new flagship sedan for the Chrysler brand that was first unveiled at the 2006 Detroit auto show.
The project “would have had our plant building four or five different models, which shows how flexible the operation is, and would have ensured that it would have had consideration for other products beyond the 2010-2011 period,” Mr. Hargrove said.
But adding production of the Chrysler 300, Dodge Charger, Challenger and Magnum to a U.S. plant would threaten the future of Brampton.
“They're saying by Wednesday of next week, if there's no change in the decision in Brampton, the board of directors of DaimlerChrysler will make a decision on which U.S. plant gets the commitment for retooling,” Mr. Hargrove said.
Stuart Schorr, a spokesman for Windsor, Ont.-based DaimlerChrysler Canada Inc., would not comment on the dispute.
Workers in Brampton voted down the proposed changes to their contracts just days after DaimlerChrysler unveiled a restructuring plan for its U.S. division that will eliminate 2,000 unionized jobs in Canada and 13,000 over-all across North America, and could include the sale or spinoff of the division.
The Chrysler moves follow even more drastic cuts made at Ford Motor Co. and General Motors Corp., which are eliminating tens of thousands of jobs and closing dozens of plants in Canada and the United States as the auto makers adjust to years of market share declines, mainly at the hands of Japan-based rivals.
While cutting jobs, closing plants and losing billions of dollars, Ford and GM have also persuaded the United Auto Workers union in the United States to make changes to health care deals, thus increasing costs of health care for union members, while reducing expenses for the companies.
The UAW has refused to provide similar concessions to Chrysler.
In Canada, the CAW agreed to the outsourcing of hundreds of construction jobs and other changes in order to win investment at a GM plant in Oshawa, Ont., for the new Chevrolet Camaro. That deal is one of several examples in which workers have been asked to give up hard-fought-for contract provisions in return for the promise of new investment.
The changes that Chrysler wants in Brampton relate to what are called alternative work schedules, under which employees at the plant work for eight hours a day, but are paid for eight hours and 48 minutes. The auto maker wants to eliminate that shift premium, outsource some janitorial jobs and amalgamate some skilled trades positions.
Ending the shift premium would cost workers about $5,000 a year apiece, Mr. Chernecki said.
At a Lear Corp. seat component plant in Kitchener, Ont., workers agreed to freeze their wages until 2010, give up a $1,000 vacation bonus and accept reduced premiums for working afternoon and night shifts. They also approved a new contract that extends the probation period of new employees to three years from two years, and cuts the wage rate of those employees to 70 per cent — from 85 per cent — of the base wage rate for more experienced workers.
That agreement is designed to make the Lear plant more competitive and give it a better chance to attract new business, such as parts for the Chevrolet Camaro and other new cars GM intends to build in Oshawa, Ont., as well as the Challenger that Chrysler will assemble in Brampton.
AUTOBLOG.COM | Posted Mar 7th 2007 6:02PM by Chris Tutor
China Car Times says that Chinese Web site Autohome is reporting Dodge will re-badge Chery's A1 mini car for sale around the world. According to China Car Times, the A1 is a QQ3 renamed for export. The new name is supposedly intended to avoid any further confrontation with General Motors' lawyers over the whole QQ vs. Spark fight.
MOTOR AUTHORITY - - The Maybach Exelero, which debuted back in 2005 and was most recently seen in Jay-Z’s latest rap video, is easily one of the most striking coupes to ever grace the stands of any car show in history. Measuring almost 6m in length and featuring a bi-turbo V12 rated at 700hp under its long hood, the Exelero has forever left its mark in the minds of car-lovers around the world. Sadly, the $8 million dollar concept would remain just that, a design study and test vehicle for Fulda Tires.
Fortunately, Italy’s Stola Group has made the claim that it will build a family of cars based on its latest concept vehicle that was presented at the Geneva Motor Show this week. The concept not only shares a sticking resemblance to the Excelero, pictured below, but it also features a similar bi-turbo V12 engine. The monster engine is based on a Mercedes-Benz unit and has been tuned by Brabus. The powerplant displaces 6.3L and develops 750hp and 1360Nm of torque, enough to reach speeds in excess of 200mph.
Stola is only planning to produce 25 examples, and if you’re wondering how much it’s going to cost then you most likely can’t afford it.
AUTOBLOG.COM | Posted Mar 8th 2007 8:57AM by John Neff
Note to criminals: if you're planning to be the lead car in a high-speed pursuit, your odds of getting away just got ever so slightly better. Ford Motor Company has decided to conduct a voluntary recall of its Crown Victoria police package Interceptor model (2003 model shown) because of small cracks that could form in the car's steel wheels during high speed pursuits. These cracks could cause "rapid air loss," or what the street folk call a blow-out, effectively allowing the no-goodnicks to get away and obviously putting the officer behind the wheel in a signifcant amount of danger.
About 109,664 examples of the 2003 to 2005 model will be recalled, though it's suspected that a very small percentage of active duty cop cars actually are rolling on defective wheels. Only two crashes have been attributed to the issue and no officers were injured. Nevertheless, Ford has been down the recall road with the Interceptor before, issuing a different wheel recall in 2003, as well as being forced to address potentially faulty gas tanks that could explode after a crash. Neither helped the automaker's relations with this country's law enforcement community, which doesn't bode well for the ancient Interceptor that's now facing stiff competition from the new hotness in police-issue whips, the Dodge Charger.
At the moment this new recall is a voluntary move by Ford, which has already notified the National Highway Traffic Safety Administration of its actions. The recall will be targeted to owners of Interceptors with specific wheels that could be affected, who will be notified and told to visit nearby dealerships where the wheels and spares can be replaced.
[Source: MSNBC]
Jae Chung, Product Designer for DaimlerChrysler, discusses the design of the new Dodge Demon.
SEC filings Union: Company will halt $700M investment in Ontario plant unless workers change stance.
Louis Aguilar and Josee Valcourt / The Detroit News
DaimlerChrysler AG is playing hardball with union workers at a Brampton, Ontario, plant who refused to accept concessions that included a pay cut of $115 a week and the outsourcing of janitorial jobs, Canadian Auto Workers officials said Wednesday.
The carmaker has told CAW leaders it will not alter the proposal rejected last month by workers at the suburban Toronto factory. And unless union leaders can convince the workers to change their minds, Daimler Chrysler will halt plans to invest $700 million that would have landed the assembly plant a new, unidentified vehicle beginning in 2010, the CAW officials said.
"Chrysler has left very little room, in fact, no room to negotiate," said Ken Lewenza, chairman of the CAW's national bargaining committee for Chrysler. "Chrysler told us based on economic challenges, it has alternative places to invest and is not prepared to go back to the bargaining table. It doesn't take a rocket scientist to know that Newark (Del.) and St. Louis (facilities) are not at full capacity."
Chrysler spokesman Dave Elshoff declined to comment.
Chrysler builds the Chrysler 300C sedan and the Dodge Magnum wagon and Charger sedan in Brampton. Plant officials recently learned the factory would also build the 2008 Dodge Challenger.
Chrysler planned to pump $700 million into the factory to support 2010 and 2011 models and add a fifth vehicle analysts predict could be a production version of the concept Imperial large sedan. That vehicle would be built on the next-generation of the LX platform that underpins the 300C and other models, to be called LY.
But like rivals Ford Motor Co. and General Motors Corp., Chrysler wants concessions from local plants before they are awarded future work. All three automakers are trying to cut costs as they restructure to restore profits.
The rank-and-file refusal to approve the concessions illustrates how tough these ratifications can be when a company is in a volatile state, said Harley Shaiken, a labor expert at the University of California, Berkeley.
"This is a critical issue any time you've got concessions on the table and sort of a volatile atmosphere," Shaiken said. "Even when the top leadership and the local leadership see no other alternative, the rank-and-file might be angry, apprehensive and take it out on the vote."
Chrysler lost $1.5 billion last year and announced a turnaround plan in February that would trim production capacity by 400,000 over the next three years by idling one factory, eliminating shifts at others and cutting 16 percent of its workers, including 2,000 union jobs in Canada.
"What this specific plant indicates is how tough restructuring can be on a local level," Shaiken said.
Chrysler wants the Brampton workers to give up "premium pay" that was negotiated when the company was in much better financial shape, said CAW president Buzz Hargrove.
The proposed concessions didn't cut hourly wage rates but eliminated pay for about 40 minutes a day -- time spent not working but preparing for work, Hargrove said. Chrysler also wanted to outsource about 40 janitorial jobs to union workers who would get a lower wage, Hargrove said.
Brampton workers rejected the deal, which was negotiated by CAW leaders and the automaker, by a 1,464 to 1,157 vote.
Shaiken called the outcome of the vote a "pretty significant defeat," but added that members who opposed Chrysler's proposal could be persuaded to change their minds.
"All the volatility around Chrysler right now may have caused some workers to dig in their heels," he said. "But there's a lot at stake for the future here."
Bruce Belzowski, a researcher at the University of Michigan Transportation Research Institute, said U.S. auto manufacturers' constant aim to reduce costs is driving them to request givebacks and outsource work to lower-wage contractors.
"This is not something that is going away. It's going to happen as much as the manufacturers will be able to convince the unions to allow them to do," Belzowski said.
Chrysler is in the midst of cutting 2,000 jobs in Canada. Of that, 1,300 are in Windsor -- currently home to 5,500 Chrysler employees who build SUVs and minivans. Brampton will lose 345 jobs.
Hargrove said the Detroit automakers' declining fortunes have pushed Canada from the fourth-largest producer of automobiles in the world to eighth in 2005. On Sunday, Hargrove will address the Brampton workers to explain Chrysler's tough stance, CAW officials said.
The workers have the option to decide to vote again on the proposal or let its rejection stand.
"This is a democratic union," Hargrove said. "In the end, they are the ones who will have to decide."
08 Mar 2007
The Stuttgart, Germany-based carmaker's sale of three-year notes is the biggest corporate debt issue in Europe since a jump in supreme mortgage failures prompted investors to demand the highest risk premiums to hold company debt in a least a month. „The market is entering into a more normal phase after the recent volatility,” said Mahmoud El-Shaer, who helps manage about $35 billion of fixed-income assets for State Street Investment Management in London.
„The bond was attractively priced.” The 4.375% bonds due March 2010 were sold at a yield premium, or spread, of 35 basis points over the midswaps rate, a benchmark for borrowing. That compares with a spread of 30 basis points for the company's €1 billion of 3.625% bonds due in November 2010, according to Fortis Bank prices. Demand for the bonds may also have been underpinned by speculation that DaimlerChrysler will succeed in its search to find a buyer for its unprofitable Chrysler division, according to El-Shaer, who placed an order for some of the debt.
Blackstone Group representatives are visiting Chrysler's US headquarters yesterday as they explore a possible investment in the DaimlerChrysler unit, a person familiar with the matter said. Cerberus Capital Management LP representatives also met officials at Chrysler two days ago, according to the person who didn't want to be named because the visit isn't public. A company spokeswoman declined to specify the use for the proceeds of the sale.
DaimlerChrylser has the equivalent of €8.3 billion of bonds maturing this year, according to data compiled by Bloomberg. The carmaker hired Commerzbank AG, Royal Bank of Scotland Group Plc and UniCredit SpA to manage the sale of the debt. The bonds also pay a yield premium of 55.3 basis points more than German government bonds of a similar maturity. A basis point is 0.01 percentage point. The company's bonds gained on February 14 after DaimlerChrysler said it may sell, or seek partners, for its Chrysler division.
Chrysler will cut 13,000 jobs after posting a 2006 operating loss of €1.12 billion, the company said on the same day. It's abandoning a nine-year attempt to build a global carmaker that brought together luxury Mercedes-Benz limousines with Dodge pickup trucks. DaimlerChrysler pays more to borrow than its rivals including Bayerische Motoren Werke AG, the world's largest maker of luxury cars, Bloomberg data show.
BMW's €750 million of 4.625% bonds due February 2013 pay investors a yield premium of 35 basis points more than similar-maturity government debt. That's about half the spread investors demand to hold DaimlerChrysler's 4.375% bonds maturing in March 2013. Moody's Investors Service rates DaimlerChrysler's debt Baa1, its eighth-highest investment grade ranking. Fitch Ratings grades the carmaker's bonds an equivalent BBB+. Standard & Poor's ranks the company's debt one level lower at BBB. (Bloomberg)
Mar 7, 2007 3:52 pm
| Magnitude | 5.6 |
|---|---|
| Date-Time | = Coordinated Universal Time = local time at epicenter |
| Location | 58.194°S, 7.548°W |
| Depth | 10 km (6.2 miles) set by location program |
| Region | EAST OF THE SOUTH SANDWICH ISLANDS |
| Distances | 795 km (495 miles) SW of Bouvet Island 3330 km (2060 miles) SSW of Cape Town, South Africa |
| Location Uncertainty | horizontal +/- 13.7 km (8.5 miles); depth fixed by location program |
| Parameters | Nst= 50, Nph= 50, Dmin=>999 km, Rmss=1.35 sec, Gp= 79°, M-type=body magnitude (Mb), Version=6 |
| Source | USGS NEIC (WDCS-D) |
| Event ID | us2007zrau |
 |
NEW YORK, March 8, 2007; Reuters reported that General Motors Corp. Chief Executive Rick Wagoner said he does not expect a consolidation in the U.S. auto industry in the near term despite the intense pressures from fierce competition and excess production capacity, The Wall Street Journal reported.
The U.S. auto industry has enough plants to produce more vehicles than it sells for at least 10 years, Wagoner said in an interview at the Geneva auto show. "What's going to make it go away?" he said in the Journal.
The Journal said he declined to comment on recent reports that GM has had talks with DaimlerChrysler AG about buying the company's ailing Chrysler Group.
(PAUL SANCYA/Associated Press)
Chrysler Group Chief Executive Tom LaSorda will meet today with Blackstone representatives.
March 7, 2007
Blackstone Group, a high-profile buyout firm, is expected at Chrysler Group headquarters in Auburn Hills today to meet with CEO Tom LaSorda and his executive team.
Representatives from the private equity firm will meet for hours with the Chrysler Group as they hear about every aspect of the struggling U.S. automaker.
The group will get the same presentation Cerberus Capital Management got Monday. That private equity firm received a briefing at Chrysler Financial on Tuesday, a person familiar with the activities said. Cerberus owns 51% of GMAC, the financial unit affiliated with General Motors Corp.Blackstone is expected to be at Chrysler Financial in Farmington Hills on Thursday.
DaimlerChrysler AG Chairman Dieter Zetsche said Monday that Chrysler Financial, which accounts for about half of the profit generated by DaimlerChrysler's Financial Services, could also be sold if there's a decision to sell or spin off the Chrysler Group.
The meetings with LaSorda and his top executives last for several hours and include a 200-slide presentation that covers the company's finances and operations.
Both Blackstone and Cerberus are leading private equity firms. Blackstone's CEO Stephen Schwarzman is on the cover of Fortune magazine with the headline: "The new king of Wall Street." Cerberus, in addition to its stake in GMAC, holds a share of GDX Automotive Inc. of Farmington Hills and is the lead investor in a bid to acquire as much as 70% of Delphi Corp.
Spokespeople for Blackstone and Cerberus declined to comment Tuesday.
Similar meetings with other potential buyers could occur next week.
Speculation has swirled about potential suitors since Zetsche refused to rule out selling Chrysler last month. In addition to the equity groups, names including GM and Magna International Inc. have popped up as suitors, but so far no one is talking about specifics.
In Switzerland on Tuesday, Zetsche confirmed that DaimlerChrysler has been involved in talks with GM about building some products with Chrysler. He told reporters that GM raised the idea.
"This has shown potential, but those talks have not come to a conclusion but have certain promise," he told Reuters.
GM CEO Rick Wagoner remained tight-lipped on the issue while at the Geneva auto show. "I really don't want to get into it," the Associated Press quoted him as saying. "It's a slippery slope."
Gerald Meyers, University of Michigan business professor and former chairman of American Motors Corp., said it is not surprising that a private equity firm would be interested in buying Chrysler, noting that these kinds of firms typically take on companies with financial problems.
"They think they can do anything. They're masters of the universe," he said. "They'll clean it up and resell it. Everybody will be rich except the people they cut loose."
Van Conway, senior managing director of Conway, MacKenzie & Dunleavy, said a private equity firm could drive the sales price of Chrysler higher than expected.
"If you put the financial performance in the traditional valuation formula, you probably don't come up with a big number. But there is a tremendous amount of money in these funds to do deals. It's an American icon, and it wouldn't surprise me if this thing would bring a number that generally surprises everybody," he said.
Chrysler Group lost $1.5 billion last year. Estimates of a stand-alone price for Chrysler have ranged from $5 billion to more than $13 billion.
Daimler-Benz AG paid $40 billion in acquiring Chrysler Corp. in 1998.
Conway said this week's meetings could be largely about sizing up LaSorda and his leadership team.
"They want to take the temperature of the management team," he said, to determine whether changes are needed.
"They want to look at the whites of their eyes and talk to them about their vision. Because if they do a deal, everything else being equal, they would rather not have sweeping changes at the top level."
Paul Cox / Special to The Detroit News
China's Brilliance unveils its concept form of the Coupe BC3.
In auto show debut, Chinese automakers aim to shift European sales into high gear.
Neil Winton
GENEVA -- China's previous attempts to kick-start car sales in Europe have ended less than successfully, but that may be about to change.
Chinese companies have vehicles on display at the Geneva International Motor Show for the first time this year, underscoring the growing role of China in the global auto industry. That includes the United States, where DaimlerChrysler AG's Auburn Hills-based Chrysler Group recently finalized a deal with China's Chery Automobile Co. to build small cars for sale mainly in North America and Western Europe under its Dodge brand.
China's Brilliance unveiled three models Tuesday in Geneva that are about to be launched across Europe, while Chinese-owned Ssangyong Motor Co. displayed the Actyon Sports, a combination SUV-pickup with a towing capacity of more than 4,000 pounds and interior amenities such as heated seats.
"This day represents a milestone on the journey that will make cars made in China popular," said Hans-Ulrich Sachs, managing director of HSO Motors Europe, a Luxembourg-based company that will import Brilliance models. "We will stand by our mission to offer European consumers vehicles with a good price-performance ratio, quality and safety."
Phil Murtaugh, a former General Motors Corp. executive who is now director of Ssangyong's board, said "Europe is our most important market."
This is the third wave of Asian imports to hit the European market. But while the Japanese took about 20 years to establish themselves, agreeing in the 1990s to voluntary quotas, and Korean makers took more than 10 years to get a foothold, some experts believe the Chinese will need less time to become serious players.
The Brilliance vehicles unveiled in Geneva -- named the BS6, the BS4 and the BC3 -- look sharp, which is perhaps not surprising given that they were developed by Giugiaro, Italy's renowned coachbuilder, with engineering work by Germany's Porsche AG.
The BS6 is built at a factory jointly operated with BMW AG in Shenyang, near China's border with North Korea.
According to Sachs, the plan is to sell 15,000 cars in Europe by the end of 2007 and set up 2,000 dealers. The company is aiming for 75,000 unit sales a year by 2009.
Sales will begin in Germany, followed by France, Italy, Spain, Portugal and Greece. Minor markets will follow in 2008, although there are no plans yet to sell in Britain, which is the only European country that requires right-hand drive vehicles.
The BS6 is a sporty sedan, about the size of a BMW 3-series, with 4-cylinder engines from 2.0 liters to 2.4 liters. The BS6 Comfort costs about $26,000. The top-of-the-range 2.4L costs an extra $2,600 and provides twin-airbags, a choice of manual or automatic transmission, electric-powered mirrors and headlight leveling. Performance is adequate rather the exciting.
An early handicap in Europe is the lack of a diesel engine.
The BS4 is a compact sedan about the size of a Ford Focus with a 1.8 liter petrol engine developing 136 horsepower, or a turbo charged version with 170 horsepower. The sporty two-door Coupe BC3, designed by Pininfarina of Italy, is in concept form only, but will be on the market in Europe by the end of the year. The BC3 is powered by a 1.8 liter turbo-charged engine. Prices of the two smaller vehicles have yet to be decided.
Sachs, who shocked the assembled media by starting his presentation an unprecedented five minutes early, said Brilliance was opening the doors to Europe.
Ssangyong, a South Korean carmaker owned by Shanghai Automotive Industry Corp., began exporting SUVs to Europe two years ago and sold close to 60,000 last year, Murtaugh said.
SAIC, China's largest passenger car maker, has production ventures with GM and Volkswagen AG and also acquired the rights to build Rover 25 and Rover 75 cars, now badged Roewe. Its deal in 2004 with Ssangyong marked the first overseas acquisition by a Chinese vehicle manufacturer.
As for the prospects of Chinese automakers exporting vehicles to the United States, GM Chairman and CEO Rick Wagoner said "I don't think they're going to come for a while."
He said he believed the Chinese were reluctant to tackle the U.S. market until they're confident they have the right vehicles. "The Chinese are incredibly smart," Wagoner told reporters in Geneva. "The Chinese government is being very thoughtful about export policies."
Paul Cox / Special to The Detroit News
"Top performance is the best protection against potential threats, and that applies for DaimlerChrysler as well," says CEO Dieter Zetsche, at the Geneva Motor Show. See full image
Christine Tierney / The Detroit News
GENEVA -- As DaimlerChrysler AG's top management weighed a possible sale of the Chrysler Group last fall, two events weakened Chrysler's prospects: its performance slumped, and the United Auto Workers union refused to give Chrysler the health care concessions it extended to the automaker's larger Detroit rivals.
But for the first time Tuesday, DaimlerChrysler CEO Dieter Zetsche alluded to other pressures bearing on the Stuttgart, Germany-based automaker -- the risk of a possible takeover of the company.
"In today's world, a 50 billion euro ($65 billion) market cap doesn't protect you from those considerations," he said in his first wide-ranging talks with reporters since the stunning Feb. 14 announcement that the nine-year merger might be dissolved.
"In the case that the current market capitalization of DaimlerChrysler doesn't represent the potential value of the group -- and I'm convinced that this is the case -- this of course triggers the interest of third parties to investigate if they're able to unlock hidden or undeveloped value," Zetsche said at the Geneva motor show.
Financial experts agree that DaimlerChrysler could be a takeover target because its stock market valuation has been weighed down by Chrysler's uneven performance. The automaker was protected in past years by its largest shareholder, Deutsche Bank, but the bank has reduced its stake and wants to shed its remaining 4.4 percent DaimlerChrysler holding.
"Potentially, they are a takeover target," said Juergen Pieper, an analyst at Metzler Bank, based in Frankfurt. He estimates DaimlerChrysler's assets are worth $30 billion more than its combined stock value. "If you split it up, you can generate value. Mercedes is one of the great brands of the world."
No option ruled out
Zetsche declined to discuss any negotiations regarding Chrysler, saying the first priority was to deliver on the restructuring plan announced last month. He reiterated that no option, including keeping Chrysler, had been ruled out.
Financial analysts who saw Zetsche last week in meetings in London, New York and Boston said he would not discuss sale or spinoff plans with them, but they came away with the impression that DaimlerChrysler's preferred option would be a sale of Chrysler.
General Motors Corp. and DaimlerChrysler are in talks about a possible sale of Chrysler to GM, people familiar with the discussions have told The Detroit News. But Zetsche would not confirm that sale talks were under way.
"I can confirm that nine months ago or more, some discussions between the Chrysler Group and GM -- I think initiated by GM but this doesn't matter -- took place to discuss some potential common interests in some segments. I think large SUVs were discussed. Beyond that, I can't confirm anything," said Zetsche, who ran Chrysler for nearly five years.
On Monday, a team from Cerberus Capital Management met with Chrysler officials in Auburn Hills to discuss a possible bid for the company, say people familiar with the discussions. Representatives of the Blackstone Group, a large private equity firm, are to arrive as early as today.
Pressure rose in Germany
Over the past year, soon after he became CEO of the DaimlerChrysler group on Jan. 1, 2006, Zetsche came under mounting pressure from investors and various constituencies on the German side of the company, including labor representatives, to get rid of Chrysler. Their frustration increased after Chrysler announced in July that it would lose money in the third quarter, then revised its forecast in September to a loss more than double its previous estimate.
As DaimlerChrysler was conducting its annual review of all the divisions, Chrysler's performance deteriorated as inventories of unsold vehicles ballooned. The other disturbing development was "the stance the union took, which was quite surprising, in saying that what we granted GM and Ford, we'll not grant Chrysler," Zetsche said.
Those weren't the decisive factors in the decision. "But I have to concede that those developments were part of our considerations."
Signs of an internal debate seemed to emerge in late October, when DaimlerChrysler's chief financial officer, Bodo Uebber, said during the third-quarter results teleconference that all options were under consideration for Chrysler. It had posted a $1.5 billion quarterly loss. The company issued a statement that night stating that Chrysler was not for sale.
Zetsche said Uebber's comments were misinterpreted, but many industry experts in Germany question whether his comments could be a slip of the tongue.
"Those remarks were placed there to open the discussion about DaimlerChrysler," said Willi Diez, who heads the Auto Industry Institute near Stuttgart. "At that time, it was a surprise because everyone was quite sure that Dieter Zetsche didn't want to separate Daimler and Chrysler because he was committed to Chrysler."
Zetsche on thin ice?
Some industry analysts say Zetsche's own position at the head of DaimlerChrysler might have been weakening. Many of the German labor representatives resented deep job cuts at DaimlerChrysler in Germany. Labor representatives make up half the supervisory board -- and they feel less loyal toward Zetsche than toward his predecessor, Juergen Schrempp.
Deutsche Bank also wants to see the stock rise.
"Zetsche's pressure comes from so many different constituencies telling him they're sick to death of Chrysler," said one analyst.
Zetsche said he was not seeking another shareholder to replace Deutsche Bank and act as a protector. Germany's other two big carmakers are effectively protected against takeovers by their leading shareholders.
"I believe protection usually is not the best environment for top performance, but the other way around. Top performance is the best protection against potential threats, and that applies for DaimlerChrysler as well."
Zetsche said the management's decision to consider all options for Chrysler was not due to outside pressures.
"The (DaimlerChrysler) AG management and the Chrysler management is not acting in reaction to pressure but in reaction to its own thinking and its own strategic process," he said.
He stressed that the process didn't take place only in Stuttgart and that Chrysler CEO Tom LaSorda was involved early on.
Said Zetsche: "A small, select group of the AG board, and definitely nobody of the supervisory board, took on this task to understand where we are, what the going-forward process should be, and ultimately deciding to look at further options as well."
When asked whether Chrysler might be sold in pieces, Zetsche declined to answer directly. But he noted that Chrysler is "a very integrated unit."
AUTOBLOG.COM | Posted Mar 6th 2007 11:54AM by Damon Lavrinc
Click the pic for the full gallery.
Our man Noah was on hand to watch Dodge unveil the Demon concept, proving that no niche is safe from the butcher-than-thou automaker. Some think it's a thing of beauty, others maintain that the crosshair grille has no place on a roadster. Regardless, most agree that this is strictly a design exercise, since going head-to-head with the other lightweight heavyweights in the market would prove to be too taxing on the DCX crew. No matter, some of us will still fantasize about the first-class hoonage potential of piloting a Demon equipped with the 300 HP turbo'd SRT4 mill at our beck and call.
Gallery: Dodge Demon Concept
Associated Press 03.07.07, 5:40 AM ET- - Airbus Chief Executive Louis Gallois on Wednesday urged politicians not to interfere with the European aircraft maker's plans to cut 10,000 jobs and spin off or close six European plants.
"While it's normal that politicians are interested, I don't want them to interfere in the company's management," Gallois said on RTL radio.
Ahead of France's April 22-May 6 two-round presidential election, most candidates have pushed for state intervention to help rescue the company from its troubles - a weaker U.S. dollar, and a euro5 billion (US$6.5 billion) profit shortfall due to the A380 superjumbo's two-year delay.
Gallois also said there was no hurry for a capital increase, an idea that the French government has said it would support.
On Tuesday, thousands of striking Airbus workers demonstrated in the southwestern French city of Toulouse, the aircraft maker's headquarters, to protest the company's restructuring plan.
Besides the job cuts - of which 4,300 would be made in France - Airbus plans to sell or close three plants and find industrial partners to take over and upgrade three more facilities producing fuselage and wing parts. Two of the six affected sites are in France, three in Germany and one in Britain.
The French government currently owns 15 percent of parent company EADS, while Paris-based Lagardere SCA owns 7.5 percent. Their combined stake is balanced by Stuttgart, Germany-based DaimlerChrysler AG (nyse: DCX - news - people ), which holds 22.5 percent of voting rights in the defense group.
March 7, 2007 | BY MARK PHELAN | FREE PRESS COLUMNIST | GENEVA, Switzerland -- Four thousand miles from Auburn Hills, DaimlerChrysler CEO Dieter Zetsche still sounded like a Chrysler guy.
Speaking in Europe, where sentiment runs strong to separate Chrysler from Daimler, he said flatly that the companies could stay togetherThat doesn't mean the German-American automaker might not sell part or all of the Chrysler Group, which it is pitching to potential buyers this week. But what Zetsche said in an interview Tuesday at the auto show in Geneva -- and the way he said it -- suggests that throwing Chrysler overboard is not the first item on his to-do list.If the offers get sweet enough or Chrysler's situation grows worse, the division could go, but Zetsche repeatedly said that maintaining the status quo -- retaining Chrysler -- remains an option. He expressed interest in the Chrysler Group's recovery plan and added that the UAW's refusal to grant health care concessions last year was a factor in DCX's decision to put Chrysler on the sale block.
The lanky German was less ambiguous the first time he pledged allegiance to Chrysler in December 2000, days after he took over the company.
He had just replaced longtime Chrysler executive Jim Holden, arriving secretly on a plane from Stuttgart, Germany, with his lieutenant Wolfgang Bernhard and communications executive Ken Levy.
Rumors were rampant, and Chrysler employees and most of metro Detroit were nervous.
A reporter asked Zetsche how he would reassure Chrysler's workers.
"I am a Chrysler guy," he replied, refusing to acknowledge any conflict between himself and the troubled business he had just taken over.
Talk is cheap, but Zetsche's actions over the next few months reinforced the impression, as he learned the intricacies of the U.S. pickup market and ramrodded approval of the elegant Chrysler Crossfire coupe through DCX's hierarchy despite resistance from the company's territorial Mercedes-Benz brand.
Tuesday, he spoke of Chrysler as "we" and "our," a distinct difference from DCX executives who refer to it as a third party: "they" and "them."
A telling moment came when he responded to a question about Chrysler's February sales.
"One of our competitors in town was higher than us and the other was lower" in fleet sales for the month, he said.
Seeing competition as who wins in "our town" -- Detroit -- among General Motors, Ford and Chrysler is as sure a sign of hometown perspective as having a taste for Vernors pop.
"Dieter has a real fondness for Chrysler and Detroit," said Michelle Krebs, editor of Edmunds' www.autoobserver.com.
Zetsche also showed that he's learned another old-time Detroit perspective: Don't hesitate to blame the UAW.
DCX evaluated all its business units last year, he said. It considered selling others, but the idea never progressed far enough to go public with any but Chrysler.
"Two things happened," to put Chrysler on the hot seat, he said. First, sales fell dramatically in the spring, and the company kept building vehicles its dealers didn't want, setting the table for Chrysler's ugly $1.5-billion third-quarter loss.
Second, "the stance the union took," when the UAW refused to give Chrysler the same money-saving health-care concessions it had granted Ford and GM, both of which were teetering on the edge of financial ruin. The union thought Chrysler was too profitable to merit a matching break.
"These developments were, of course, part of our considerations," Zetsche said.
The union declined to comment.
Zetsche repeatedly said he expects Chrysler to meet its goal of having an operating profit margin of "better than 2.5%" in 2009.
"I know very well the tremendous skills of Chrysler's employees," said Zetsche, who ran Chrysler for more than five years. "I am very confident."
Zetsche effectively shot down the theory that DCX might keep the attractive Jeep brand and shed the rest of Chrysler. "Chrysler is a very integrated unit," he said.
He also conceded that uncertainty over Chrysler's fate probably damaged the company's sales last month.
"It's quite natural" for buyers to shy away if the company's future is in doubt, he said. "It is the task of management to re-instill confidence in our employees and buyers."
He refused to say when a decision on whether to sell the business would be made.
Perhaps that's an auctioneer's trick to drive up the price, and the final decision would not be his alone. But Dr. Z sounded less like a motivated seller than like Doctor Detroit.
