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Date:
Thu, 17 May 2007 10:36 WesternIndonesiaTime
Subject:
Chrysler "Divorce" from Daimler
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Daimler-Benz Chairman Juergen
Schrempp, left, and Chrysler Chairman Robert Eaton sign a
merger agreement in London in this May 6, 1998 file photo.
DaimlerChrysler AG will sell 80.1 percent of its
money-losing Chrysler Group to private equity firm Cerberus
Capital Management LP for US$7.4 billion (euro 5.5 billion),
the company announced Monday, May 14, 2007, unwinding a 1998
merger aimed at creating a global auto giant.
(AP Photo/Pascal
Plessis, file)
AP - Mon May 14,
6:35 AM ET |
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The
DaimlerChrysler Warren Truck Assembly Plant is seen in
Warren, Michigan, United States, in 2006. Daimler has ended
a nine-year marriage with Chrysler, saying goodbye to one of
the biggest-ever transatlantic mergers by agreeing to sell
the loss-making US firm for just a fraction of its original
purchase price.
(AFP/Getty Images/File/Bill Pugliano)
AFP/Getty Images/File -
Mon May 14, 9:29 AM ET
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In
Greek mythology, Cerberus or Kerberos (Greek
Κέρβερος, Kerberos, "demon
of the pit") was the
hound of
Hades, a monstrous
three-headed
dog
(sometimes said to have 50 or 100 heads) with a
snake for a
tail; he was also seen with a dragon's tail and
serpentine mane.
Cerberus guarded the gate to
Hades and ensured that spirits of the dead could enter, but
none could exit (additionally no living person was to come
into Hades). Among his siblings are; his sister,
Chimera and his brother,
Hydra. He is the offspring of
Echidna and
Typhon.
He was overcome several times:
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cerberus image source:
http://ftp.ubi.com/ |
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Hercules' final
labour was to capture Cerberus, which he did by
wrestling it into submission.
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Orpheus used
his musical skills to lull Cerberus to sleep.
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Hermes put him
to sleep with water from the river
Lethe.
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In
Roman mythology, The Sybil of
Cumae lulled Cerberus to sleep with drugged
honeycakes in order to permit
Aeneas fuller entry to the underworld.
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In a Greek tale,
Psyche also lulled Cerberus to sleep with drugged
honeycakes.
In the Greek Oracle of the Dead
at Cumae in southern Italy, the recently excavated
subterranean shrine was found to contain chains fixed to the
wall for three large dogs before the entrance to the shrine
of Hades and Persephone. The three dogs would have
represented Cerberus in this ancient temple. ( source:
wikipedia.com ) |
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 In
a photo provided by DaimlerChrysler, a 2007 Chrysler
Nassau concept is shown in an undated file photo. When
Daimler gobbled up Chrysler in May 1998, the U.S.
automaker was selling Jeeps and Chryslers by the
thousands, building up profits and employing more than
126,000. Nine years later, the Chrysler that Daimler is
preparing to sell to a private equity firm is much
leaner with about 80,000 workers. But it's also having
trouble competing in the global automotive market.
(AP Photo/DaimlerChrysler, ho,
file)
AP - Tue May 15, 12:32 PM ET |
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New PT
Cruisers are parked at the Daimler Chrysler of Mexico
plant in 2001. The head of Canada's largest
private-sector union said Monday he feared possible job
losses in this country as a result of German-US auto
giant DaimlerChrysler's sale of its money-losing unit
Chrysler to a US private equity firm.
(AFP/File/M. Vazquez)
AFP/File - Mon May 14, 1:53 PM ET |
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A row of new
Dodge Ram pickup trucks are shown Tuesday, May 15, 2007
at a dealership in Mesa, Ariz. Dodge's parent company,
Daimler Chrylser, will report it's earnings today.
(AP Photo/Matt York)
AP - Tue May 15, 4:07 PM ET |
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Daimler sells Chrysler to Cerberus
by Simon Morgan
Mon May 14, 12:51 PM
ET
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FRANKFURT (AFP) - A
nine-year tie-up between Daimler and Chrysler
was officially unravelled on Monday, with an
announcement that the loss-making US firm is to
be sold to private equity firm Cerberus. But
even though Cerberus takes its name from a
monstrous three-headed dog from hell in Greek
mythology, the companies, analysts and investors
alike hailed the deal as the best solution for a
marriage that turned unhappy very early on.
As part of its
ambitions to become a truly global player,
Daimler had acquired Chrysler for 36 billion
dollars in 1998 and has ploughed billions more
into the US auto maker in subsequent years. But
the group was finally forced to ditch its dream
of global domination and Daimler announced
Monday that it was drawing a line under an
investment that has turned disastrously wrong.
Under terms of the sale, scheduled to be
completed in the third quarter, Cerberus will
pay 5.5 billion euros or 7.4 billion dollars for
an 80.1-percent stake in Chrysler, just a
fraction of the original purchase price.
DaimlerChrysler, the
world's number five car maker, will change its
name back to Daimler but will continue to hold a
19.9-percent equity interest Chrysler as a sign
that the two sides would continue to
collaborate. Initially, the deal will cut
three-to-four billion euros off
DaimlerChrysler's bottom line this year. And the
transaction would result in a net cash outflow
of 500 million euros for DaimlerChrysler. But
Daimler will now be able to focus on its
profitable Mercedes brands and its trucks
division. |
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The sale of Chrysler
comes as no surprise after chief executive
Dieter Zetsche hinted at such a move in
February. Originally marketed as a "marriage
made in heaven" and seen as a launch pad for
Daimler's dreams of becoming a global power, the
merger of Daimler and Chrysler in May 1998 very
quickly turned sour.
Despite massive cost
cutting in 2000 and 2005, including the loss of
40,000 jobs and numerous plant closures, the US
unit still managed to sustain an operating loss
of 1.12 billion euros last year. Chrysler is to
retain all of its financial obligations for
employees' pension and healthcare benefits,
meaning that the deal will not burden Daimler
with any debt, it said. The news therefore drove
up the price of DaimlerChrysler shares, which
were showing gains of 2.04 euros or 3.37 percent
at 62.65 euros in late afternoon trade on the
Frankfurt stock exchange.
Despite the ominous
roots of Cerberus' name and the unpopular
reputation of investment funds in general, which
have been dubbed "locusts" in Germany for the
ruthlessness with which they pursue profits,
unions welcomed the deal.
The powerful US
labour union, United Auto Workers (UAW), said
the takeover of Chrysler by Cerberus was in the
car maker's best interest. The UAW said it had
had an "in-depth" private meeting with CEO
Zetsche and Chrysler chief Tom LaSorda in
Stuttgart. "It was explained that the status quo
for the Chrysler Group was no longer an option,"
said UAW president Ron Gettelfinger.
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Sunday evening I was going to leave the
house of my brother after attending a funeral of my aunt who
formerly lived for many years at a house number 9. By the time I was
entering my brother's car, a Toyota Rush passed by and I remark:
"That's the new Toyota, the Rush......." and my brother said
yes.
The next day there was the news about
the nine-year tie-up between Daimler and Chrysler was officially
unraveled, Daimler selling Chrysler to a private equity firm
Cerberus. According to Wikipedia, the name Cerberus comes from
Greek mythology Cerberus or Kerberos (Greek
Κέρβερος, Kerberos, "demon
of the pit"), the
hound of
Hades, a monstrous
three-headed
dog
(sometimes said to have 50 or 100 heads) with a
snake for a
tail; he was also seen with a dragon's tail and
serpentine mane.
For me, the name of Daimler
reminds me with Lady Di, especially since the merger
agreement of Daimler and Chrysler took place in London on May 6,
1998, approximately one year after Lady Di's car accident in Paris. While
the private equity firm Cerberus is like reminding me with Paris
Hilton's boy friends from Greek, the previous one Paris Latsis and
the recent Stavros Niarchos.
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