Mumbai:
Private equity group Cerberus Capital Management is
close to a deal to acquire US carmaker Chrysler, a group
company of German parent company DaimlerChrysler, reports
said.
DaimlerChrysler put its struggling US auto unit up for
sale in February after Chrysler posted a loss of nearly
$1.5 billion for 2006 on dwindling sales of its mainstay
light trucks.
The Chrysler sale would unwind a failed nine-year-old
merger between US brands Jeep, Dodge and Chrysler and
Germany''s Mercedes amidst restructuring by the US auto
industry.
If the deal goes through, it would be the first time
a financial buyer takes control of a major automakers.
Chrysler chief executive Tom LaSorda would continue
to run the company while former chief operating officer
and Cerberus adviser, Wolfgang Bernhard, would have
a board sans executive powers.
Chrysler had earlier rejected a $4.5-billion cash offer
by billionaire Kirk Kerkorian. The purchase price is
expected to be well below the $36 billion the former
Daimler-Benz AG paid for Chrysler Corp. in 1998.
Cerberus was among the firms that co-led the proposed
$3.4-billion investment to support Delphi Corp. in the
auto-parts maker''s emergence from bankruptcy.
But Delphi said last month that it expected Cerberus
to pull out of the plan considering the problem of negotiating
new labor contracts between the bankrupt supplier and
the United Auto Workers (UAW).
UAW represents some 50,000 workers. The union has said
that it wants a corporate or "strategic" buyer
for the company and not a private equity firm if the
sale is not scrapped.
Chrysler,
which is in the process of cutting 13,000 jobs, expects
to return to profitability in 2008. Chrysler''s current
four-year contract with the UAW expires in September.
DaimlerChrysler has fallen to No 4 in the US light vehicle
market behind Toyota with a 15.4-per cent market share
this year. The company''s sales for all brands are down
2.1 per cent in 2007 through April.
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