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Chrysler is said to be courting suitors

A senior executive says the automaker is sharing detailed financial information.

February 24, 2007|From the Associated Press

DETROIT — Whatever was normal inside Chrysler Group's Auburn Hills, Mich., headquarters is normal no more as top executives simultaneously try to manage a major restructuring plan and sell cars -- and possibly their company.

A senior Chrysler executive said Friday that the company was giving detailed financial information to selected potential suitors and was working with its investment bank, JPMorgan Chase & Co., to avoid divulging sensitive information.

The Chrysler executive, who spoke on the condition of anonymity because the information was confidential, said the company was assembling a list of potential qualified suitors that the executive would not identify.

"It's not an auction," the executive said. "There will be some firms that will be allowed in to look at it, and there will be a prospectus that will be presented to them."

Among those that analysts say are exploring a purchase of the struggling company are four private equity firms as well as General Motors Corp.

The equity firms, Apollo Management, Blackstone Group, Carlyle Group and Cerberus Capital Management, all declined to comment Friday. GM also has not commented, although it will not deny reports that it's interested.

Chrysler Chief Executive Tom LaSorda spent the week trying to soothe fears about what would happen to the company, asking employees to focus on making and selling great cars. He told dealers in a conference call Thursday that the board of Chrysler's German parent, DaimlerChrysler, has endorsed the restructuring plan as the path toward a return to profitability by 2008.

Meanwhile, Volkswagen spokeswoman Christine Ritz said Europe's biggest automaker was not interested in acquiring money-losing Chrysler if it was put up for sale. The Renault-Nissan auto alliance and Hyundai Motor Co. said earlier that they were not interested in buying Chrysler.

Erich Merkle, an industry analyst at auto consulting company IRN Inc. in Grand Rapids, Mich., said it made little sense for private equity firms to be interested in Chrysler.

"You've got a lot of work to turn something like that around," he said. "Private equity guys like to get a quicker turn on their buck without so much headache."

Merkle, who says Chrysler could be a good value to someone, believes that the sale talk is corporate theater on DaimlerChrysler's part, giving the company leverage as it enters contract talks with the United Auto Workers and placating German investors who want to dump Chrysler.

DaimlerChrysler's U.S. shares rose 94 cents to $70.92 on Friday.

Chrysler announced last week that it lost $1.5 billion in 2006 and said it expected losses to continue through 2007. DaimlerChrysler, however, earned $4.26 billion in 2006.

The news was accompanied by plans to shed 13,000 jobs, including 11,000 production workers and 2,000 salaried employees as it trims expenses and factory capacity to match declining sales. The automaker also announced the closure of one plant and layoffs at several others.

In announcing the cuts, DaimlerChrysler Chairman Dieter Zetsche said all options were on the table for Chrysler. He would not rule out a sale.

As part of the restructuring, Chrysler on Friday delivered early-retirement offers to eligible, nonunion white-collar workers.

Chrysler would not say how many workers received the offers. The company has 16,800 nonunion salaried workers and a total salaried workforce of about 21,500.

Offers to unionized white-collar workers and to blue-collar workers will go out next week, the company said.

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