Better hope they get that Challenger out soon!

Is the Chrysler Group for sale?


Posted Oct 25th 2006 2:14PM by John Neff
Filed under: Chrysler, DaimlerChrysler, Earnings/Financials

DaimlerChrysler reported third quarter earnings today of $686 million in net profit, but its Chrysler Group division dragged down that profit margin by posting a loss of $1.47 billion, a figure that completely erased the gain of $1.24 billion made by Mercedes-Benz. During a presentation today, DaimlerChrysler CFO Bodo Uebber didn't rule out the possibility that the Chrysler Group could be sold off. While far from saying the division has a For Sale on its windshield, Uebber told reporters, "We don't exclude anything here... We will do our analysis. Second, we will talk about measures. And third, we will draw our conclusions."

DCX predicts the Chrysler Group will finish 2006 about $1.2 billion in the red. As we reported earlier, the automaker has put together a task force comprised of executives from all its divisions to study the Chrysler Group's business plan and help the division cut an average of $1,000 from the cost of each vehicle it produces. No doubt the conclusions of this internal study will be used to make recommendations for or against keeping the Chrysler Group in the fold.

We seriously doubt that this proposition is being seriously considered by DCX. For one, the Chrysler Group has been profitable for DCX in the past and likely will be again once it nails down a decent health care deal with the UAW, pads its lineup with more small car offerings and less SUVs, and gets the Challenger out into the public's hands. There are other unprofitable brands under the DCX umbrella, like SMART for instance, that would logically be ahead of the Chrysler Group in line for sale. Still, Uebber should've known the fire storm of speculation that would start if even the prospect of selling the Chrysler Group was even mentioned in passing.