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Chrysler Group For Sale?

Old 11-14-2006, 06:26 AM
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Default Chrysler Group For Sale?

FRANKFURT, Germany (AP) — DaimlerChrysler (DCX) said Wednesday it is reviewing all aspects of its U.S.-based operations, including management and strategy, after a $1.5 billion operating loss at the Chrysler division dragged down the automaker's third-quarter profit 37%.
DaimlerChrysler's overall profit beat analysts' estimates, but the tough talk about examining the Chrysler Group led analysts to question whether the division could even be sold off.

Chrysler executives said they are "in no way satisfied" with the third-quarter results but said it is far too early to draw any conclusions.

DaimlerChrysler earned 541 million euros ($686 million) in the July-September period, down from a profit of 855 million euros a year earlier. Analysts polled by Dow Jones Newswires had expected a loss of 47 million euros ($58.9 million).

Overall, DaimlerChrysler's operating profit fell 51% to 892 million euros ($1.13 billion), but beat analysts' forecast of 549 million euros ($688.5 million).

While results lagged at Chrysler — hampered, like its U.S. rivals, by difficult market conditions — the German-American automaker saw strength in its Mercedes Car Group, where operating profit more than doubled to 991 million euros ($1.3 billion).

Overall sales fell 8% to 35.2 billion euros ($44.6 billion), hurt by a 26% decline at Chrysler to 9.5 billion euros ($12 billion).

The 1.16 billion euro operating loss at Chrysler compared with an operating profit of 310 million euros the year before and "was primarily the result of a decrease in worldwide factory unit sales, an unfavorable shift in product and market mix, and negative net pricing," DaimlerChrysler said in a statement.

Chrysler CEO Tom LaSorda said the company is "in no way satisfied" with the third-quarter results.

"We have taken dramatic steps to reduce production and shipments to address the inventory situation in the U.S. and we continue to work to find new ways to eliminate waste, lower our costs and improve quality," he said in a statement.

Chief Financial Officer Bodo Uebber said seven teams comprised of executives from Chrysler and other parts of DaimlerChrysler would analyze and examine the division's business practices and review "all aspects of the value chain."

The teams will review Chrysler Group's product strategy, portfolio management, capital management, fixed cost management, structural changes, manufacturing, material costs, revenue management and quality. No timetable was released.

"Our aim must be to improve the earnings situation at the Chrysler Group as quickly, as comprehensively and sustainably as possible," Uebber said.

He offered no direct reply when asked during a conference call if the company is considering selling Chrysler or bringing in a partner.

"We have announced a thorough optimization program. We're looking at all details of the value chain, we're looking at structural changes," he said. "What we need to safeguard is the sustainable profitability of the Chrysler Group and DaimlerChrysler."

Asked if he could say that a sale of Chrysler had been ruled out, Uebber said he could not provide any more information.

"First we do our analysis, then we talk about measures, then we draw conclusions," he said.

The company warned last month of a large loss at Chrysler, but said it would return to profit in the fourth quarter.

"Though a number of new models — the Wrangler, Compass, Aspen, Nitro — are scheduled for imminent launch, Chrysler faces an uphill turnaround task," said Stephen Cheetham, a European auto analyst at Sanford C. Bernstein in London.

Chrysler, like its American rivals, has suffered as high oil prices lead buyers to shift toward smaller cars, away from sport-utility vehicles and other models that use more fuel.

Last month, DaimlerChrysler lowered its 2006 operating profit forecast to around 5 billion euros ($6.3 billion) from its previous forecast of 6 billion euros ($7.5 billion), citing problems at Chrysler.

Looking ahead, the company said it expected a slight decrease in global demand for automobiles in the fourth quarter, but said its overall sales growth for the year should be around 3%, down from the 4% it saw last year.

Because of lighter demand in Japan and the U.S., DaimlerChrysler said it expected its total vehicle sales for 2006 to be less than the 4.8 million it sold in 2005.
Old 11-15-2006, 12:16 PM
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Join Date: Jun 2005
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Default RE: Chrysler Group For Sale?

Chrysler definitely not for sale... maybe...
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