Industry awaits impact of deal

DaimlerChrysler AG's decision Monday to turn over control of Chrysler to a private equity firm leaves Chrysler Group's 80,000 workers and its auto dealers, including those in this area, to ponder what the future holds for the giant automaker.

People in the automotive world need to take a "wait-and-see" attitude toward the deal with Cerberus Capital Management LP, rather than make wild claims about what might occur, said Bo Corwin, owner of Corwin Chrysler of Hickory, Washington County.

German-based DaimlerChrysler AG said it will sell 80.1 percent of its interest in Chrysler for $7.4 billion, splitting up what it had hoped in 1998 would become an automotive superpower.

Cerberus Chairman John Snow, a former U.S. treasury secretary, said Chrysler's management will remain and the new owners will work with the United Auto Workers union to return the maker of Chrysler, Dodge and Jeep to profitability.

The dealers knew Cerberus was a suitor for Chrysler, but didn't know about its plans, said Mick Wolcott, owner of North Hills Chrysler Jeep in Ross.

"I don't know what their future plans are. You don't know if they are going to cut out products" or sell off parts of the company, said Wolcott, who also operates Mick's Dodge Chrysler Jeep in Robinson.

Corwin knows that initial appearances can be deceiving when it comes to merging operations. When Daimler-Benz bought Chrysler in 1998, it appeared, "we got the best bride at the dance," Corwin said.

But, it turned out that Daimler and Chrysler made for an "ill-advised marriage," he said.

"They did not work at it. It was a marriage where no one wanted to budge," Corwin said.

Dealers are hoping the new Chrysler can lift sales in this area. Chrysler, Dodge and Jeep collectively are in third place in terms of sales among the Big Three automakers in the 11-county Pittsburgh region.

They are projected to sell 13,536 new light vehicles this year in the 11-county Pittsburgh region, according to the first quarter 2007 Pittsburgh Auto Outlook, which is published for the Greater Pittsburgh Area Automobile Dealers Association. That's a 3 percent drop from sales of 13,941 in 2006.

By comparison, Chevrolet, GMC, Buick and Pontiac are projected to sell 30,363 new light vehicles in the region, a 7.6 percent decline from the 2006 sales of 32,650 units.

News of the sale of Chrysler was welcomed by Jane Sapone, owner of Town & Country Motors, of Ligonier, Westmoreland County, because it ends months of speculation about the automaker's future.

Having an owner whose primary business is not making vehicles will result in a different approach to the business, said Sapone, who owns the dealership with her husband, David.

"It's going to be competitive," she said, noting of private equity firms that "they're a little more impatient."

One aspect of Cerberus' automobile business -- its majority stake in General Motors Acceptance Corp., the financial arm of GM -- could make it easier for prospective buyers to take delivery of Chrysler models, Sapone said.

"We will have a broader base to draw from" to get financing for prospective car buyers, Sapone said.