In case you don't remember, the car company that once was known by the initials DCX (I'm not sure it was ever "officially" Daimler-Chrysler), was accused of lying to shareholders and even sued by some of them (Kirk Kerkorian, for example)for lying. The infamous "Partnership of Equals".....that wasn't.
Anyway, I'm in the bank, of all places today, when I see on their "in house" TV network, the Cerberus is suing Daimler for lying about the company formerly known as DCX. There were no details given....I'll have to watch BBC and or NBC nightly news to see what's going on.
OK, as I understand, Daimler sold Cerberus 80% of Chrysler last year, with the remaining 20% being transferred this year.
Now Cerberus claims Daimler "gussied up Chrysler to make it look good". In particular, they say Daimler inflated the value of leases and loans.
Daimler, on the other hand, says Cerberus is making unreasonable demands in the negotiations for the remaining 20%.
There's 1/5 of what was once one of the biggest companies in the biggest industry in america, and nobody wants it.
Thanks T.B. for the info.
Just one question.....why buy ONLY 4/5ths of something?
I'm no financial "wizard", obviously, so I wonder if Cerberus was buying DCX in "chunks", or was this some sort of "layaway" plan?
Still, there's no getting around it, those "crafty Germans" have snookered a whole new bunch of finance guys.
If you want some good reading on this read Lee Iacoca's second book. He was beside himself on the Daimler "merger".
They probably only bought 4/5s b/c that is all the financing they could get. Not to mention Daimler and chrysler do use some shared platforms and parts i.e. the sprint. You must also remember that this deal went down when money was cheap. Daimler Benz has made a few poor acquisitions, the chrysler one and also mitsubishi which they owned a 30% share of. Cerberus is just a big nasty investment firm that buys up businesses, fixes them up, and sells them to make a profit. If they didn't know what they were getting into by buying chrysler for 1/4 of what Daimler paid when they merged, they are stupid.
What does "merger of equals" mean when the difference between the companies is so stark. At least the deal is done and Daimler can go back to making good cars. Nobody wants to babysit at chrysler.
