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N0KFQ > TODAY 07.05.13 16:20l 57 Lines 2589 Bytes #999 (0) @ WW
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Subj: Today in History - May 7
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...
May 7, 1998:
Daimler-Benz announces purchase of Chrysler Corp.
On this day in 1998, the German automobile company
Daimler-Benz--maker of the world-famous luxury car brand
Mercedes-Benz--announces a $36 billion merger with the United
States-based Chrysler Corporation.
The purchase of Chrysler, America's third-largest car company, by
the Stuttgart-based Daimler-Benz marked the biggest acquisition
by a foreign buyer of any U.S. company in history. Though
marketed to investors as an equal pairing, it soon emerged that
Daimler would be the dominant partner, with its stockholders
owning the majority of the new company's shares. For Chrysler,
headquartered in Auburn Hills, Michigan, the end of independence
was a surprising twist in a striking comeback story. After a
near-collapse and a government bailout in 1979 that saved it from
bankruptcy, the company surged back in the 1980s under the
leadership of the former Ford executive Lee Iacocca, in a revival
spurred in part by the tremendous success of its trendsetting
minivan.
The new company, DaimlerChrysler AG, began trading on the
Frankfurt and New York stock exchanges the following November. A
few months later, according to a 2001 article in The New York
Times, its stock price rose to an impressive high of $108.62 per
share. The euphoria proved to be short-lived, however. While
Daimler had been attracted by the profitability of Chrysler's
minivans and Jeeps, over the next few years profits were up and
down, and by the fall of 2003 the Chrysler Group had cut some
26,000 jobs and was still losing money.
In 2006, according to the Times, Chrysler posted a loss of $1.5
billion and fell behind Toyota to fourth place in the American
car market. This loss came despite the company's splashy launch
of 10 new Chrysler models that year, with plans to unveil eight
more. The following May, however, after reportedly negotiating
with General Motors about a potential sale, DaimlerChrysler
announced it was selling 80.1 percent of Chrysler to the
private-equity firm Cerberus Capital Management for $7.4 billion.
DaimlerChrysler, soon renamed Daimler AG, kept a 19.9 percent
stake in the new company, known as Chrysler LLC.
By late 2008, increasingly dismal sales led Chrysler to seek
federal funds to the tune of $4 billion to stay afloat. Under
pressure from the Obama administration, the company filed for
bankruptcy protection in April 2009 and will enter into a planned
partnership with the Italian automaker Fiat.
73, K.O. n0kfq
N0KFQ @ KB0WSA.MO.USA.NA
E-mail: kohiggs@gmail.com
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