| DaimlerChrysler, the world's second largest | | | | quarter. The Pension as well as the |
| producer of luxury cars and manufacturer of | | | | health-care costs associated with Chrysler |
| high quality Mercedes window motors has | | | | will be taken over by the new company. |
| announced recently that the first quarter | | | | |
| profit that they obtain is more than doubled | | | | Why sell Chrysler? The merger was not |
| and Mercedes has helped a lot in offsetting | | | | working from the very beginning as a matter |
| the loss at the US Chrysler Group which is | | | | of fact DaimlerChrysler's stock peaked five |
| being sold. | | | | months after the merger and never recovered |
| | | | since then. Chrysler lost $680 million last |
| The net income of DaimlerChrysler has | | | | year and surrendered market share to Toyota |
| increase to 1.97 billion euros ($2.67 | | | | and was relying too much on the sluggish |
| billion), or 1.89 euros a share from 781 | | | | North American market. Zetsche has failed to |
| million euros or 77 cents explained Chief | | | | keep Chrysler profitable after the |
| Financial Officer Bodo Uebber at a recently | | | | reorganization which he himself has started. |
| held conference call. Revenue also decline by | | | | |
| 6 percent to 35.4 billion euros. The company | | | | Since 1998 Chrysler has posted annual profits |
| gain from the sale of stake in the parent of | | | | of only $5 billion while its losses escalate |
| Airbus SAS. | | | | infuriating investors further. The latest |
| | | | recorded loss by Chrysler marks a third |
| Chief Executive Officer Dieter Zetche is | | | | descent into losses since the last time that |
| further attempting to reduce the risk to | | | | Lee Iacocca saved the automaker from |
| profit growth by finally selling Chrysler AG | | | | bankruptcy 25 years ago. To keep itself |
| to Cerberus Capital Management LLC. Zetsche | | | | afloat Chrysler has reduced its workforce by |
| is expecting for more than 7 percent profit | | | | 13,000 and closed one of its factories. It |
| increase for this year at Mercedes, which has | | | | has also unveiled new models in the hope to |
| introduced new and expensive vehicles like | | | | offset the decline in sales last 2006. |
| the S-class sedan. DaimlerChrysler is also | | | | |
| expecting to keep the truck unit profitable. | | | | Chrysler CEO Tom LaSorda has again vowed to |
| | | | get Chrysler back to profitability since now |
| The shares increase by 1.84 euros or 3 | | | | he has all the time to really focus on the |
| percent to 63.54 euros valuing the company at | | | | recovery of the automaker without the |
| 65.5 billion euros. The stock has also | | | | distractions from analysts and the need to |
| increased by 29 percent since February 14 | | | | submit quarterly reports, according to |
| when Zetsche said that "all options' were | | | | Cerberus Chairman John Snow in an interview |
| open for Chrysler. | | | | just recently. |
| | | | |
| The Separation DaimlerChrysler has finally | | | | The buck stops here Uwe Treckman, an equity |
| announced that it would be ending its | | | | strategist at Dresdner Bank said, "Once |
| nine-year ownership of the money losing | | | | Chrysler has been sold the cash-flow to |
| Chrysler and would be handing control to | | | | sales-ratio will improve significantly." |
| Cerberus including the $19 billion retirement | | | | |
| liabilities for US employees. Ron | | | | The Mercedes Car Group will also implement a |
| Gettelfinger, the President of the United | | | | profit recovery plan that will include Smart, |
| Auto Workers have welcomed the deal and | | | | Mercedes-Benz and Maybach brands especially |
| promised to help in the recovery of the | | | | now that Chrysler will finally separate from |
| ailing US carmaker. | | | | them. The growing demand for heavy trucks in |
| | | | Europe and Asia are also helping to offset |
| It can be remembered that Chrysler has posted | | | | the loss Chrysler. Mercedes-Benz earnings |
| a loss in the quarter amounting to 1.49 | | | | before interest and tax were 792 million |
| billion euros from a profit of 641 million | | | | euros in the quarter from a loss of 735 |
| euros. The loss includes reorganization | | | | million euros a year earlier. |
| expenses of 941 million euros. | | | | |
| DaimlerChrysler also shared 120 million euros | | | | For the first quarter, Mercedes-Benz Car |
| to assist "troubled suppliers" and added 54 | | | | Group sales declined by 2.8 percent trailing |
| million euros to cut administration and | | | | behind larger rivals like the Bayerische |
| management jobs. | | | | Motoren Werke AG and Volkswagen AG's Audi |
| | | | luxury car business. Despite the decline, |
| In addition, existing projects with | | | | Mercedes-Benz is still able to come up with |
| Mercedes-Benz will also continue, providing | | | | remarkable sales figures for its most |
| opportunities to share development costs. | | | | expensive vehicles like the S-Class |
| There will also be a joint council consisting | | | | full-sized sedan and the GL-Class large sport |
| of management board representatives that be | | | | utility vehicle which has given the brand |
| formed to discuss business projects. The deal | | | | more profit compared to its other models. |
| is expected to be completed in the third | | | | |