Daimler Plans To Sell Remaining Chrysler Stake
DETROIT (AP) -- Germany's Daimler AG said Wednesday that it is in talks to sell its remaining stake in Chrysler LLC to private-equity firm Cerberus Capital Management LP.
Daimler spokesman Han Tjan confirmed a report in Germany's Manager Magazin that the company is in talks to sell the 19.9 percent it owns in the U.S.-based automaker, but he declined to provide further details.
Cerberus Capital Management LP bought 80.1 percent of Chrysler from Daimler in August 2007 in a $7.4 billion deal. The sale ended a stormy nine-year partnership between Daimler and Auburn Hills, Mich.-based Chrysler.
Since Cerberus took control of the automaker, Chrysler has faced tough times. The U.S. economy and auto sales have slumped, and $4-per-gallon gasoline has sent consumers away from its trucks and sport utility vehicles toward small cars, where Chrysler's lineup is thin. Sales are off 24 percent through August.
As a private company, Chrysler does not have to report its earnings, but reporters and analysts were able to calculate Chrysler's performance from Daimler's financial statements. Buying 100 percent of the company would make Chrysler's earnings completely private.
On Tuesday top Chrysler executives told dealers that the company has lost $400 million this year. Chief Executive Bob Nardelli and Vice Chairman Jim Press used a satellite feed to address dealers who gathered in movie theaters across the country for a three-hour presentation on the state of Chrysler's business and future products.
Chrysler spokesman Stuart Schorr would not comment on what was discussed with dealers, but said the company has only talked about its performance for the first half of the year.
"There was no new financial information announced yesterday," he said.
The Chrysler executives, according to a dealer who saw the presentation, did not state the time frame for the $400 million loss, nor did they say if it was an operating or net loss. The dealer did not want to be identified because the meetings were private.
Chrysler also has issued a statement in the past saying it lost $400 million in the first quarter.
Daimler has indicated through its own financial results last month that Chrysler lost an estimated $510 million in the first quarter. Chrysler lost $1.6 billion in 2007.
The presentations to dealers came just after Chrysler publicly unveiled three rechargeable electric car prototypes and promised to bring one of them to market in 2010.