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Discussion Starter · #1 ·
http://www.forbes.com/markets/feeds/afx/2007/02/27/afx3469232.html

AFX News Limited
Chrysler being courted by 3 Chinese carmakers - report
02.27.07, 7:32 PM ET

BEIJING (XFN-ASIA) - Three China-based automakers have separately begun talks with DaimlerChrysler AG about potentially buying its Detroit-based Chrysler unit in order to speed up their global expansion, the South China Morning Post reported, citing unnamed sources.

Shanghai Automotive Industry Corp (SAIC (nyse: SAI - news - people )), Jilin-based FAW Group Corp and Anhui-based Chery Automobile have joined carmakers from around the world in early talks with the German company about acquiring all or part of the third-largest US automaker, the Hong Kong newspaper reported.

The report did not say whether any of the Chinese players were planning to be part of a joint bid with foreign rivals.

Yesterday, Shanghai-based Oriental Morning Post cited unnamed sources as saying that FAW Group was considering a bid for Chrysler, adding that the Chinese carmaker had already dispatched representatives to the US for talks.

[email protected]
 

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Well , that was expected , Although I am not sure of the results , Yet I can't see it hapenning , yet again if it did , it will be a revolution ! :p

weird you didn't state your PERSONAL opinion at the end as usual RIHC ?
 

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Some questions:

1.) Would Daimler want the Chinese to get Chrysler technology?
2.) Would the USA want to see jobs go East?
3.) Will Daimler feel under pressure to sell to GM?

Ford allegedly refused to sell Aston Martin to Geeley because of point 1, I think there will be just to much pressure to stop the Chinese getting all of Chrysler. However if GM want Jeep and Dodge, then perhaps Chyrsler itself will be up for grabs?
 

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mgrovernut said:
Some questions:

1.) Would Daimler want the Chinese to get Chrysler technology?
2.) Would the USA want to see jobs go East?
3.) Will Daimler feel under pressure to sell to GM?

Ford allegedly refused to sell Aston Martin to Geeley because of point 1, I think there will be just to much pressure to stop the Chinese getting all of Chrysler. However if GM want Jeep and Dodge, then perhaps Chyrsler itself will be up for grabs?
1.) Daimler Chrysler are already in a joint venture agreement with Beijing Autos to manufacture a few models, namely the Jeep and Mercedes
2.) Probably not
3.) Isnt GM a hairs breath from going under? Im sure there is some pressure to keep Chrysler 'American' but seeing as the Germans already have it what does it matter anyway?
 

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Discussion Starter · #5 ·
mgrovernut said:
Some questions:

1.) Would Daimler want the Chinese to get Chrysler technology?
Nope.

2.) Would the USA want to see jobs go East?
Well, it can't be stopped.

3.) Will Daimler feel under pressure to sell to GM?
Daimler will sell to anyone who comes up with money. If Chinese are serious about Chrysler take over, then they need to come up with $5 billion in cash. If not, Daimler will offload Chrylser to GM for GM's shares.

if GM want Jeep and Dodge, then perhaps Chyrsler itself will be up for grabs?
That's what it looks like it.
 

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Well it looks like SAIC is not interested...

-------------------------------------------------------------


SAIC denies Chrysler report which it says is speculation


"SHANGHAI Automotive Industry Corp yesterday denied a newspaper report saying it intends to buy DaimlerChrysler AG's financially troubled Chrysler unit.

China's largest auto maker in terms of sales said the report was market speculation and it has no plan to acquire Chrysler, SAIC's spokesperson told Shanghai Daily via a telephone interview.

A South China Morning Post report said yesterday SAIC was joining a spate of Chinese car makers whose talks focused on buying US-based Chrysler, citing unidentified sources.

The other domestic rivals also included First Automotive Works Group Co and Chery Automobile Co Ltd. A day earlier, Shanghai-based Oriental Morning Post reported FAW had dispatched representatives to the United States to talk about the deal but the report did not give other details.

Gao Yuan, a FAW spokesman, refused to comment on the issue except to say "FAW does have a plan to go international, but I have never heard of the deal,"said Gao. "Besides, buying Chrysler could cost too much."

Chery's spokesman Wang Wei denied the report and Trevor Hale, a Beijing-based spokesman from DaimlerChrysler, also did not comment.

Auburn Hills, Michigan-based Chrysler posted a loss of US$1.5 billion last year. DaimlerChrysler, its parent, agreed to cut 13,000 jobs to improve its efficiency and has been reported to be talking with General Motors Corp to sell the profit-losing unit.

"It's almost impossible for any of the three Chinese car makers to take over Chrysler as a whole," said Frank Y. Chou, associate partner of Value Partners (China) Management Consulting.

"Chrysler's assets and potential debt are too expensive for them and the deal may also meet difficulties from the US government. But the Chinese car makers still have a chance to buy some parts of Chrysler's assets or technology."

Meanwhile, DaimlerChrysler's supervisory board has approved the partnership with Chery which will allow the Chinese auto maker to build small cars under the Chrysler brand, which will be sold mainly in North America and Europe, the car maker said in a statement yesterday."

Shanghai Daily

http://www.shanghaidaily.com/sp/article/2007/200703/20070301/article_307450.htm
 

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...

According to Autoblog, The Chrysler divison is worth the following:
Dodge: $6.6 billion.
Jeep: $5.3 billion.
Chrysler brand: $3.2 billion.
Global operations, such as Chrysler's stake in Magna Steyr: $1.4 billion.
Joint ventures, such as Beijing Jeep: $682 million.
Real estate, including the company headquarters, technical center and proving grounds: $1.4 billion.
Deferred taxes and overfunded pension assets: $7.1 billion
or a total of about $25.6 billion.
(http://www.autoblog.com/2007/02/27/place-your-bids-chryslers-worth-explained-briefly/).
:cool:
But What happens to Daimler after it gets rid of Chrysler? It could be
up for a takeover according (again) to Autoblog:
(http://www.autoblog.com/2007/02/28/could-a-chrysler-free-daimler-be-a-takeover-target/):D
 

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4*real*Made_in_China said:
Deferred taxes and overfunded pension assets: $7.1 billion
Doesn't Chrysler have unfunded pension liabilities somewhere around $30 billion USD? So how can its pension assets be overfunded?
 

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neko said:
Doesn't Chrysler have unfunded pension liabilities somewhere around $30 billion USD? So how can its pension assets be overfunded?
Good, Neko. Everyone on the planet seems to keep forgetting why this company simply WILL NOT be purchased for cash - Each piece of the pie has enormous value - Dodge trucks alone is a fantastic asset - but the entire pie is poisoned with the un-funded pension, entitlements, and union.

I said it a month ago, I say it again - this company will be purchased by a Chinese company, immediately put into bankruptcy to blow off the unions & pensions, then either re-emerge as a whole or be parted out then.

The post above reminds me of when someone niave looks at the assets of a company (say Chrysler at 20 billion) and says "Wow, the company is worth 20 billion!"

Uh, No. There are two sides to a balance sheet, assets and liabilities. If a company has 40 gazzilion dollars in cash under the mattress, yet it has 41 gazzilion dollars in liabilities, the company is less than worthless.

GM looking to purchase Chrysler? Please. You cannot expand out of losses by purchasing another company with losses. GM, Chrysler, etc. should be embracing winners in other countries to boost themselves
 

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Discussion Starter · #10 ·
Rock-N-Roll said:
Good, Neko. Everyone on the planet seems to keep forgetting why this company simply WILL NOT be purchased for cash
If you are GM, then you don't need to pay cash.

If you are Chinese, then you better come up with billions in cash, as Daimler doesn't take Chery stocks as payment.

GM looking to purchase Chrysler? Please. You cannot expand out of losses by purchasing another company with losses.
SInce Daimler is not asking for cash, why not...
 

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Real_I_Hate_China said:
If you are GM, then you don't need to pay cash.

If you are Chinese, then you better come up with billions in cash, as Daimler doesn't take Chery stocks as payment....

You have to be consistent, RIHC. It was you that stated anyone/everyone would need 5 billion, I was the one who said money would never change hands. I do respect your posts, seriously, but don't waffle on things you previously said.

Real_I_Hate_China said:
SInce Daimler is not asking for cash, why not...
Simple economics - If you have two companies that lose money seperately, putting them together will just make a larger loser. Obviously more complicated than that. And you cannot say they could combine and consolidate - unions, pensions, liabilities just won't go away.
 

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It'd be a total and complete disaster if any Chinese companies buys Chrysler. Politics alone would kill it.

Chinese companies must refrain from repeating the buying frenzy Japanese put on in the 80's. It literally set Japan back 15 years.

Must not mix ego with business savvy.
 
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