Ford officially announced that it has sold Aston Martin, its luxury sports car brand, to an investment group lead by David Richards, Prodrive founder and chairman. Ford said the deal is valued at $925 million, and it will retain a $77 million stake in Aston Martin.

The new owner of Aston Martin is a consortium comprised of: David Richards, founder and chairman of Prodrive, a world-leading motorsport and automotive technology company; John Sinders, an avid Aston Martin collector and a backer of Aston Martin Racing; and Investment Dar and Adeem Investment Co, international investment companies headquartered in Kuwait.

The sale is expected to close during the second quarter. Current Aston Martin CEO, Dr. Ulrich Bez, will continue to lead the brand.

Ford’s announcement after the jump.

## Source: Ford ##

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Ford expects its luxury Premier Automotive Group to report a profit in 2007, according to Lewis Booth, the head of Ford’s European operations. The Premier Automotive Group is made up of the Volvo, Jaguar, Land Rover, and Aston Martin brands. Last year, Ford announced that it is looking to sell Aston Martin. Current reports say the sale is imminent, and could be announced as soon as this week.

Jaguar, in particular, has been a drag on the PAG’s profits, and there have been many calls for Ford to cut lose the troubled brand. Ford CEO Alan Mulally has said there are not plans to sell Jaguar at this time, but he has not rule out reversing that decision. It appears that Ford will give Jaguar one more chance behind a radical new design language that debuted on the C-XF Concept (shown).

Ford’s PAG lost $327 million in 2006 and $1.15 billion over the last three years. Over the last several years, Volvo has been the PAG’s savior, with earnings as high as $1.2 billion annually. However, Volvo’s stale lineup hurt its 2006 sales, and thus the brand’s profitability. But with the all-new S80, V70, XC70 and the new C30, Volvo is expected to return to its high earnings. Ultimately, the health and overall profitability of the PAG in 2007 relies mostly on success at Volvo.

## Source: Reuters ##

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As we reported earlier today, Ford could announce the sale of Aston Martin as soon as this week. According to The Times, Ford is in exclusive talks with Prodrive for the sale of Aston Martin. Prodrive currently runs Aston Martin’s racing team and Subaru’s world rally team. It will enter Formula One with its own team in 2008.

According to sources, Ford had selected Prodrive because its bid — thought to be close to £450 million — was higher than the other bidders. It seems the hold up is that Prodrive is having some trouble financing its bid. Prodrive’s founder, David Richards, is working with investors to secure financing. British private equity group Apax owns a 49 percent of Prodrive but is not involved in the Aston Martin bid.

As expected, neither Ford nor Prodrive would comment.

## Source: TimesOnline ##

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The Ford Motor Company said on Wednesday that its accelerated Way Forward turnaround plan, announced in September, would cost an estimated $11.18 billion. This is a $1.2 billion increase from it previous estimate in January. Most of that amount will be spent on programs to lay off employees.

Ford says it has already accrued $9.98 billion of the reorganization costs in 2006. The automaker is expected to spend $5.96 billion on “worker reduction programs,” $2.74 billion on charges related to scaling back pensions, $2.2 billion in fixed-asset impairment charges and $281 million associated to plant idlings.

Ford will accrue the additional $1.2 billion, primarily related to salaried job cuts, in the first quarter of 2007.

## Source: Reuters ##

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Lamborghini said that its 2006 pretax profits soared as new models attracted customers. Lamborghini’s profits for 2006 were more than four times higher than in 2005 (18.1 million euros vs. 4.4 million euros). The Italian luxury sports-car maker’s sales were up 30 percent in 2006 to a record 2,087 cars, and sales revenue was up 43 percent to 346.3 million euros.

Lamborghini said much of the increase in sales were for the new Gallardo Spyder and Murcielago LP640 Coupe, with sales of 817 and 318 units, respectively.

Lamborghini President Stephan Winkelmann has said that sales for 2007 will rise at least five percent, helped by the new Murcielago LP640 Roadster, which is already sold out for 2007 and partially for 2008. The automaker will expand its dealer network by adding 10-12 dealers to its existing 100, with half of those being in the States.

## Source: Bloomberg ##

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The Chrysler Group and the UAW have agreed to two special buyout programs that will provide early retirement and separation incentives to union represented employees as the automaker tries to reduce its hourly work force by 11,000 people. Earlier this month Chrysler announced that it is cutting 11,000 hourly jobs and 2,000 salaried jobs to return to profitability by 2008.

The buyout program — officially called an Enhanced Voluntary Termination of Employment Program (VTEP) — provides a lump sum payment of $100,000 for employees with at least one year of credited service.

The early-retirement program — called an Incentive Program for Retirement (IPR) — will offer a lump sum payment of $70,000 pretax and full health care benefits to those with 30 years of service. The program will also be available to workers who meet a combination of age and years-of-service eligibility, either those at least 60 years old and with at least 10 years of service or workers who are at least 55 years old and whose age and credited service add up to at least 85 years.

Eligible employees were notified of their options today.

Chrysler Group statement after the jump.

## Source: Chrysler ##

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General Motors has been hyping its new global rear-wheel drive vehicle architecture, highlighting the platform nearly every time it talks about its upcoming Chevrolet Camaro and Pontiac G8. But the Camaro and G8 are just the first two U.S. products to ride on GM’s new RWD platform, which is engineered by Holden, GM’s Australian subsidiary.

With a common architecture engineered for global applications, General Motors is expected to realize significant cost savings, when compared to having a unique chassis for each region. GM estimates that the Zeta global annual volume will be somewhere between 500,0000 to 700,000 units. Development savings are estimated to be $500 to $1,000 per vehicle, which means a total savings between $250 million to $750 million.

While the cost savings from a common architecture is important because it allows GM to turn a profit on lower volume, exciting vehicles, one of the key elements of GM’s Zeta architecture is its flexibility since GM can do pony cars, convertibles, sedans, and wagons, all off the same platform.

GM’s Vice Chairman Bob Lutz said GM “could do a whole lineup of entirely different-looking cars using common architectural components.”

The Zeta platform offers GM something it hasn’t ready had since the Fisher Body days of the 1960s, flexibility in areas like wheelbase, front overhang, rear overhang and overall length. With the Zeta, GM can create an RWD vehicle with a long hood, Camaro, or a short hood, Impala or G8.

Creating unique vehicles off of a common platform is something the Japanese automakers have been doing for some time, General Motors has committed itself to sharing and taking advantage of its massive global resources.

## Source: AutoWeek ##

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Talks between General Motors and DaimlerChrysler about the future of the Chrysler Group are serious and have been going on for two months, according to the Detroit News. GM has been in discussions with DCX about acquiring all of the American arm and folding it into the greater GM.

The high-level talks started back in December, with GM Chairman Rick Wagoner and DaimlerChrysler CEO Dieter Zetsche meeting in Detroit to discuss the sale of Chrysler. While talks are still at a high-level, there have been at least four meetings between Wagoner, Zetsche, and CFOs from both companies. Discussions are said to be continuing, primarily between the CFOs. As usual, both companies declined to comment.

If GM purchased Chrysler, it would no longer exist as a unique company or a subsidiary. Instead all of its brands and factories would become part of the larger GM organization.

Auto industry experts say a deal would be extremely risky for GM, which is in the middle of its own turnaround. Analysts believe GM already has too many brands, and too much cannibalization of its products, adding three more would just make it worse. If GM’s cutting of more than 30,000 jobs and Chrysler’s recent announcement of 13,000 job cuts are painful, the combination of GM and Chrysler would result in even more cuts — massive cuts. And how is the UAW going to react to that.

## Source: Detroit News ##

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Korean automaker Hyundai may also be interested in purchasing Chrysler from DaimlerChrysler, if DCX decides to dump its American arm, according to new reports. Last week, most of the speculation was on a General Motors purchase of Chrysler Group, but now rumors are spreading of a pack of international suitors. Last week, DaimlerChrysler chairman Dieter Zetsche said JP Morgan had been brought in to review Chrysler’s future, saying “all options are on the table.”

Despite its pension deficit, incresing healthcare costs, aging factories and poor product mix, the main draw for Hyundai and other potential foreign buyers is Chrysler’s dealer network. With Hyundai’s big push in the U.S., the expanded dealer network will be a great asset for Hyundai’s growth.

Chrylser has more value than just its dealer network, but it would take a lot of work to reap the rewards. Hyundai has long wanted a full-size truck and the Dodge would be just the ticket. Chrysler’s minivans have been redesigned, and while Hyundai has its own minivan, the Chrysler van’s are the segment leaders.

While a Hyundai purchase of Chrysler makes more sense than a GM bid, it still may not make as much sense as some of the other potential international bidders, like China’s Chery and SAIC.

## Source: TimesOnline ##

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Automotive News continues to insist that General Motors is in talks with DaimlerChrysler about the possible buyout of the Chrysler Group. Inside sources in both the U.S. and Germany claim that GM is interested, and that high-level talks are taking place between executives.

GM spokesman Tony Cervone wouldn’t comment, but said, “We have always said that conversations (between GM and many other parties) have happened all the time, and many times they don’t come to fruition.”

When asked about the deal, Klaus Franz, a top GM executive in Europe, said acquiring Chrysler would be a “disaster”. “This is only a step to remain the number-one automaker,” added Franz.

All of this speculation was launched by DaimlerChrysler CEO Dieter Zetsche stating that the company was open to all options for the Chrysler group, including a sale.

## Source: Automotive News ##

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Following today’s announcements, DaimlerChrysler responded to queries about the potential sale of the Chrysler Group. Statement follows:

Today the Supervisory Board will reach a decision on the Board of Management’s decision to restructure the Chrysler Group. The Board of Management intends to consider other, more far-reaching strategic options with partners in order to support and facilitate the program. No option is being excluded in the interest of arriving at the best possible solution for the Chrysler Group and DaimlerChrysler as a whole.

More news as it comes.

## Source: DaimlerChrysler ##

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In a turnaround from his statements last fall, DaimlerChrysler CEO Dieter Zetsche would not rule out a sale of the Chrysler Group. According to a report by Reuters, Zetsche said all options are on the table.

“In this regard, we do not exclude any option in order to find the best solution for both the Chrysler group and DaimlerChrysler,” said Zetsche.

Following Chrysler Group’s $1.48 billion third-quarter loss, DCX CFO Bodo Uebber refused to rule out selling Chrysler. However, DaimlerChrysler issued a statement the next day saying Chrysler wasn’t for sale.

Zetsche refused to comment on a report that DCX has begun talks with General Motors for the Chrysler Group. Sources say that talks are in full swing but at an early stage.

Reports also indicate the Zetsche has hired investment bankers to review strategic options for the Chrysler Group.

## Source: Automotive News ##

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DaimlerChrysler today published its preliminary financial results for 2006. Despite a significant decline in earnings at the Chrysler Group, DCX recorded an operating profit of $7.28 billion in 2006, in comparision to $6.843 million in 2005. DaimlerChrysler total revenues increased by 1 percent to $200.1 billion.

The decline at the Chrysler Group was more than offset by a substantial improvement at the Mercedes Car Group, the Truck Group and the Financial Services division. DaimlerChrysler sold a total of 4.7 million vehicles in 2006 (down from 4.8 million in 2005).

The Mercedes Car Group sold 1,251,800 vehicles in 2006 — up slightly from 1,216,800 in 2005. Revenues of $72.0 billion were 9 percent higher than last year. But the operating profit is the big news — $3,187 million in 2006, compared with an operating loss of $666 million in 2005.

The drag on DaimlerChrysler for 2006 was the Chrysler Group, which faced significant challenges in 2006. The Chrysler Group shipped 2.7 million Chrysler, Jeep and Dodge vehicles worldwide in dealerships in 2006, down slightly from 2.8 million in 2005. The result of lower volumes and a weaker U.S. dollar for the year, the Chrysler Group’s revenues for the year of $62.2 billion were significantly lower than the $66.1 billion in 2005. While the operating profit at Mercedes was the big news, it is the operating loss at Chrysler. For 2006, the Chrysler Group posted an operating loss of $1,475 million, compared with an operating profit of $2,024 million in 2005.

The Truck Group added $2,666 million in operating profit in 2006, with the Financial Services division adding other $2,262 million in 2006.

Full press release after the jump.

## Source: DaimlerChrysler ##

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The Chrysler Group today announced a three-year plan that will cut 13,000 jobs and close its Newark, Del., assembly plant, which builds the Dodge Durango and Chrysler Aspen SUVs. The Recovery and Transformation Plan seeks to return the automaker to profitability by 2008.

The 13,000 job cuts will complete by the end of 2009, and will consist of 11,000 hourly workers and 2000 salary employees. 9,000 of the juob cuts will be in the U.S. and 2,000 in Canada.

The plan will eliminate a shift at the Newark Assembly Plant this year, before idling the plant in 2009. Chrysler will also cut a shift at the the Warren, Mich. Truck Plant, this year. In 2008, it will eliminate a shift at the St. Louis South Assembly Plant that builds minivans. Chrysler will also close it parts distribution center in Cleveland this December. The cuts will reduce total production capacity by 400,000 units per year.

Chrysler CEO Tom LaSorda said the automaker will have to learn to do more with less, and has set a goal of reducing its product platforms from 12 to seven by 2012. While Mercedes is trying to prevent platform sharing with Chrysler, DCX CEO Dieter Zietche is likely to be behind plans to share architectures between Chrysler and Mercedes.

Full press release after the jump.

## Source: DaimlerChrysler ##

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When DaimlerChrysler’s Chrysler Group announces its restructuring plan tomorrow, and with it comes the expectation that there will be an increase in parts sharing between Mercedes-Benz and Chrysler. And there are many on the Mercedes side that aren’t too happy about it.

Chrysler’s restructuring, which will be revealed tomorrow, is said to include plans for next-generation SUV platform that will underpin both the Mercedes M-Class and Jeep Grand Cherokee. The same plans are on the table for the next-generation Mercedes A-Class, the Dodge Caliber and Chrysler PT Cruiser.

Mercedes purists fear sales and margins would suffer if buyers could get basically the same car in a sister brand for less money, but just about every other automaker in the global auto industry does the same thing, even Porsche — at least for one vehicle. The most obvious exception is BMW.

Just look at Toyota/Lexus for proof that it works. It isn’t a common architecture, components or platforms that can destroy a brand, its poor product development and execution. Just look at Ford’s problem child Jaguar — specifically the S-Type and X-Type.

Chrysler isn’t going anywhere, despite the calls for a Chrysler spinoff from its parent. Mercedes is going to have to get used to sharing.

## Source: The Detroit News ##

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