Think you had a rough Monday? Daimler's was worse.
It started the day by giving up completely on Chrysler. Daimler held on to 19.9 percent of Chrysler in hopes of salvaging its disastrous merger. Well, that didn't work out too well, so Daimler agreed to give up its remaining shares to Cerberus. Daimler also forgave $700M in loans it made to Chrysler and agreed to contribute $400M to Chrysler's pension plans over the next two years. Ouch.
Later in the day, Daimler announced that it had lost $1.86 billion in the first quarter of 2009. Daimler had already written off its stake in Chrysler, so those losses aren't even the result of the earlier agreement.
So there you have it, the Daimler merger with Chrysler is officially a disaster from start to finish. Nice idea, Juergen Schrempp, hope you're enjoying retirement.
firstwagon says:
08:26 AM, 04/28/09
It's really odd they can do so well with Mercedes but screw up Chrysler so bad.
BTW: Don't take too much faith in the size of the loss. I worked for big business long enough to know corporate accounting is a "flexible" type of math. Right now is a great time to write down everything you can think of as the market is expecting you to lose money.
jederino says:
09:41 AM, 04/28/09
I guess all the hype in the 90's where every automaker and their brother wanted to become a leveraged, multi-national entertainment company (aka "Prestige, International"). Oftentimes, bigger ain't better, I guess?! Or, you can't polish a turnip?
estreka says:
09:59 AM, 04/28/09
Best $1.8B Daimler ever spent.
tryan says:
10:42 AM, 04/28/09
I'm sure the real sore point was the $700 (hundred) in loans it forgave... ;)
Although it's sad to see Daimler giving up completely on Chrysler, it was ultimately the right business decision.
hondacura4 says:
02:11 PM, 04/28/09
"It's really odd they can do so well with Mercedes but screw up Chrysler so bad."
Chrysler was in trouble long before Daimler was involved. I dont think Daimler dug deep enough to really understand how bad of shape Chrysler was in.
uncanny_man says:
03:24 PM, 04/28/09
Good riddance to Daimler and their meddling with chrysler and jeep. If Chrysler survives, maybe chrysler can go back to being luxury and jeep can go back to being all-terain without Daimler telling Chrysler what they can and can't do. Also, maybe now that they aren't working with Mercedes' unreliable platforms, they can go back to making a solid product for the rest of us.
firstwagon says:
04:05 PM, 04/28/09
"Chrysler was in trouble long before Daimler was involved"
That's a tough one. I've read info that's says they were in trouble and info says they were very sound.
I do know they had a much more competative line up in the late 90's before Daimler took over. Almost every new design they came out with after the take-over was worse then the car or truck it replaced.
Daimler would have approved those cheap rubbermaid interiors and clunkly exterior styling that has been become the hallmark for most Chrysler products.
For fit and finish I blame the UAW who (ironically) will become the majority owner of Chrysler now ... or so I heard on the radio today.
I wonder if they will be as tolerent of bad workmanship now that their pension plan rides on the company doing well.
cwc1 says:
06:27 PM, 04/28/09
Chrysler *was* in good shape when Daimler-Benz bought it. They were a low cost producer and had a lot of innovation at that time. Daimler wanted Chrysler for the strengths it had, but as more of Chrysler's key people were either pushed out or voluntarily left, the culture that had made Chrysler the company that it was, was eventually destroyed. The business culture clash that ensued further complicated the merger.
Juergen Schrempp was the one who had sold the idea to Chrysler's shareholders as a "merger of equals", and then later admitted that he had intended a total takeover of Chrysler all along.
alman08 says:
09:56 PM, 04/28/09
did i hear someone say "unreliable platform from mercedes" and "chrysler making solid product"? omg... someone please take him to the doc!