DaimlerChrysler Says Chrysler For Sale, But Doesn’t Share Details

When DaimlerChrysler AG met with shareholders, they were looking for more information on the potential sale of the Chrysler unit, but didn't get the briefing they hoped for.

BERLIN (AP) - Shareholders of DaimlerChrysler AG had hoped for a decision on the sale of the money-losing Chrysler unit, or at least news on when that might happen, but got neither at a meeting marked by simmering tension over the automaker's future.

The company's board would acknowledge only that an outright sale was among the options being considered Wednesday, despite an ongoing recovery plan to stem losses, cut 13,000 North American jobs and pare back production.

''As announced on Feb. 14, we are open to all options for future collaboration with Chrysler,'' Chairman Dieter Zetsche told some 7,900 shareholders crammed inside Berlin's exhibition center. ''The statement is still true today.''

He said the talks had been with ''potential partners who have shown a clear interest'' and ''so far, I am satisfied with the process. Everything is going according to plan.''

However, he would not say with whom the world's fifth-largest automaker had been talking.

Shareholders, many of whom have criticized from the start the 1998 merger of Daimler-Benz and Chrysler Corp. in a $36 billion deal, were agitated about the lack of updates.

Zetsche's remarks ''confirmed what we already knew,'' said Stephen Cheetham, research analyst for European autos with Sanford C. Bernstein Ltd. in London.

Zetsche urged patience, noting that the situation is complex and pledged that DaimlerChrysler would act in the best interests of the company, shareholders and workers.

Shareholder, Henning Gebhardt, the head of German equities at DWS, the fund management group for Deutsche Bank, said he appreciated the need for diligence, but worried that the ultimate price could be too high.

''If Chrysler is finally led before the divorce court judge, we would be very grateful,'' he said. ''But what will happen if you don't find a new groom or if he demands an inappropriately high dowry?''

Gebhardt's reference to divorce was apt given that former Chairman Juergen Schrempp, who presided over the merger, had called it a marriage made in automobile heaven.

Chrysler has struggled as American buyers have flocked to more fuel-efficient vehicles.

''The crucial factor was the unforeseeable shift in demand to smaller, more fuel-efficient vehicles which was triggered by increased gas prices in the U.S.,'' Zetsche said.

The final straw for the marriage may have been the U.S. unit's operating loss last year of $1.5.

In a first tacit admission that a sale was being explored, Zetsche said in February that all options regarding the unit were on the table.

Since then, at least three groups reportedly have expressed interest in Chrysler, including Canadian auto-parts supplier Magna International Inc., which has reportedly submitted a bid to buy the business for as much as $4.7 billion.

Cerberus Capital Management LLC and a consortium of investors led by Blackstone Group each have reviewed Chrysler's finances and are expected to make bids.

No matter when Chrysler is sold, Daimler is unlikely to make back what it paid. Analysts have valued the unit at between nothing and $13.7 billion.

Members of the Canadian Auto Workers, the United Auto Workers of the U.S. and German unions met Tuesday night for more than three hours to plan their strategies. They reiterated that Chrysler should not be sold, and that if it is any deal should not lead to major job cuts.

The unions will play a vital role in any deal because their representatives account for half of the seats on DaimlerChrysler's supervisory board, the U.S. equivalent of a board of directors.

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