Canadian supplier Magna International and an unnamed private equity group have placed a bid for the Chrysler Group, according to KeyBanc Capital Markets analyst Brett Hoselton. The bid for Chrysler is worth approximately $4.7 billion. Given most analysts stating that Chrysler is worth anywhere from nothing to around $13 billion, the offer may not be as low as it sounds.

DaimlerChrysler could also consider offering Magna a minority stake in Chrysler, if other bidders “retreat.” DaimlerChrysler expects that Magna’s bid will not be the last before its annual shareholder meeting on April 4th.

## Source: Reuters ##

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Cerberus Capital Management, one of the two leading contenders to buy the Chrysler Group, has hired former Chrysler COO Wolfgang Bernhard as a consultant. Cerberus and private equity firm Blackstone Group have emerged as front runners in the bids for Chrysler.

As a former executive at Chrysler, Bernhard was one of the primary architects of Chrysler’s short-lived rebound earlier this decade. He could be an asset to Cerberus’ potential bid with his knowledge of Chrysler’s strengths and weaknesses.

Bernhard was most recently at Volkswagen before leaving during the automaker’s management shake-up. Bernhard joined VW after he was dropped at DaimlerChrysler in 2004 just before he was about to take over the Mercedes Car Group. Don’t be surprised to see Bernhard running the Chrysler Group if Cerberus ends up as the next owner of the automaker.

## Source: Automotive News ##

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Two DaimlerChrysler shareholders have called on the automaker to drop "Chrysler" from the company's name if the Chrysler Group isn't sold by March 31st, 2008. The proposal from shareholders Ekkehard Wenger and Leonhard Knoll have requested the amendment the company's articles of incorporation at the annual meeting April 4 in Berlin.

"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," they wrote.

Under the proposal to change DaimlerChrysler's name, the shareholders have proposed that the automaker's name be changed to Daimler-Benz AG.

DaimlerChrysler is opposed to the name change. "The DaimlerChrysler name is established all over the world," the company said in a statement. "There are no grounds to change the name of the corporation."

## Source: Detroit Free Press ##

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DaimlerChrysler has said that all of its future vehicles will be available with an optional hybrid powertrain. DaimlerChrysler CEO Dieter Zetsche told German automotive magazine Auto Motor und Sport that hybrids are “very important” due to new European and U.S. regulations on CO2 emissions.

DaimlerChrysler’s first hybrid will be a hybrid version of the Dodge Durango, which will use the two-mode transmission currently being developed in conjunction with BMW and General Motors. Zetsche said the first Mercedes-badged hybrid vehicle will arrive for the 2008 model year.

## Source: Auto Motor und Sport ##

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In the saga that is the potential sale of the Chrysler Group, another automaker is said that it is not interested in acquiring the troubled American arm of DaimlerChrysler. Last week, China’s SAIC said it does not have any current plans for any overseas acquisitions. This announcement came in response to a Hong Kong newspaper report that China’s largest automaker carmaker had begun talks with DaimlerChrysler AG about buying Chrysler.

“We have no plans for acquisitions at the moment,” said SAIC spokeswoman Zhu Xianjun.

The potential sale of the Chrysler Group has lead to speculation that Chinese automakers, including FAW, SAIC and Chery Automobile, may be interested in Chrysler as an easy way of the entering the U.S. market.

However, it looks like SAIC is another automaker is in expanding list of automakers that is not interested in the Chrysler Group. Volkswagen, Fiat, Nissan-Renault, Hyundai, and now SAIC have all said they were not interested in Chrysler.

## Source: Reuters ##

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DaimlerChrysler is considering holding on to the Chrysler Group’s Jeep brand in the possible sale of the American arm of the Anglo-German company, according to German newspaper Handelsblatt. According to inside sources, DaimlerChrysler is considering splitting the Jeep brand out Chrysler and keeping it independent. Experts believe that Jeep fits well with the Mercedes brand, and offers a line of vehicles that don’t fit in the Mercedes brand.

While taking Jeep off the table may make sense for Mercedes, with only Dodge and Chrysler brands, it makes the possible sale of the Chrysler Group much harder.

## Source: Yahoo ##

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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 ##

(more…)

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The DaimlerChrysler Supervisory Board today finally signed off on the limited partnership between the Chrysler Group and Chery to develop small vehicles. Under the agreement, Chery would build vehicles to be distributed under the Chrysler brands, primarily in North America and Western Europe. While DaimlerChrysler’s press release says “the Chrysler brands,” we assume it is talking about Dodge, as it is the only Chrysler brand that makes sense for a small car.

Back in December, Chrysler announced a preliminary agreement with Chery to build a new small car in China for worldwide export. At that time, Chrysler Group CEO Tom LaSorda said the automaker was not considering a production version of the Dodge Hornet concept, but rather it would a Dodge-branded Chery model. Word on the street is that Chrysler is now considering a production version of the Hornet, because of quality concerns of Chery vehicles.

While DaimlerChrysler has signed off on the deal, it’s still contingent upon approval of the Chinese government.

Full press release after the jump.

## Source: DaimlerChrysler ##

(more…)

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Volkswagen, Europe’s largest automaker, has become the latest to say it is not interested in acquiring DaimlerChrysler’s Chrysler Group.

“There are no such considerations at the moment,” said a Volkswagen spokesman when asked whether the company was looking at acquiring Chrysler.

Since DaimlerChrysler announced that it was considering all options for the Chrysler Group, Nissan-Renault, Fiat and Hyundai have all said they are not interested in Chrysler. While many automaker’s are ruling themselves out, only General Motors is known to be having talks with DaimlerChrysler. Most analysts say aquiring Chrysler would only add to GM’s problems, when it is in the midst of its own massive turnaround.

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Despite exploring an alliance with General Motors last year, Nissan-Renault is not interested in acquiring DaimlerChrysler’s Chrysler division, said a Nissan official. While Nissan-Renault is open to new partnerships, it is not looking at a new partnership right now because it is focused on its own financial woes, said a Nissan spokeswoman.

Carlos Ghosn, CEO of both Nissan and Renault has said a North American ally would be a good balance for the company. But after Nissan reported a 22 percent drop in earnings for its October-December quarter, the company has changed its priorities. Ghosn said Nissan faced a “performance crisis” that must be fixed as “soon as possible.”

“As Mr. Ghosn has said, the company right now is as it is today because it has its own problems inside and we’re not going outside to look for the solutions,” said Nissan spokeswoman Madoka Soma. “We’re not in a rush for a partner.”

With Hyundai and Nissan-Renault saying they are not interested, the list of potential buyers gets even shorter.

## Source: Forbes ##

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Chrysler is considering having Chery Automobile build a new Chrysler-designed vehicle, not a car based on a Chery design, due to quality concerns. Back in December, Chrysler and Chery announced plans for Chery to build a new small car in China for worldwide export. Originally, Chrysler was considering a Chery model and not a car based on the Dodge Hornet concept, but it’s now considering building the production version of the Hornet, according to AutoWeek.

The likely reason for the change would be due to quality concerns. Chery is known for low-cost production, including the low price of components, and the cheap components often come at the expense of quality. Under the new plan, Chery would be responsible for purchasing of car parts, but Chrysler will oversee supplier selection.

Chery spokesman Wang Wei would not confirm whether or not the Hornet was being considered, but said, “we will definitely cooperate with DaimlerChrysler, but the specifics of the agreement are still under discussion.”

“We don’t even have a signed contract with Chery yet. Product-specific announcements are still out in the future,” said Chrysler spokesman Dave Elshoff.

When the original announcement was made, we assumed that Chery would build the Hornet for Chrysler. While it didn’t look like it at the time, it now appears to be more likely that the Hornet will see production.

## Source: AutoWeek ##

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Hyundai Motor Co, the sixth-largest automaker in the world, has emphatically denied reports that it is interested in acquiring the Chrysler Group, the troubled U.S. arm of DaimlerChrysler.

Hyundai responded to an online article published by the U.K.’s Times of London. “The report is not true… Hyundai Motor did not have a plan (to bid for Chrysler),” said the Korean automake in a brief statement.

“We are not considering to buy Chrysler because our hands are full,” said Hyundai spokesman Jake Jang.

Hyundai has had it own struggles over the last year, following the indictment, and later criminal conviction of Chung Mong-koo, chairman of the Hyundai Motor Group.

## Source: Forbes ##

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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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