Notices
Off Topic A place to boldly go off topic. Just about anything goes.

Onex, Magna eye bid for Chrysler

Old 04-11-2007, 08:59 AM
  #1  
Super Moderator
Thread Starter
 
Join Date: Jan 2006
Posts: 4,503
Likes: 0
Received 0 Likes on 0 Posts
Default Onex, Magna eye bid for Chrysler

Thanks to purnrg for this article

Onex, Magna eye bid for Chrysler


Two of Canada's most aggressive and successful businessmen, Gerald Schwartz of Onex Corp. and Frank Stronach of Magna International Inc., are working on a joint bid for all of money-losing auto maker Chrysler, according to people familiar with the sale process.

The rationale behind a Magna-Onex partnership is that Magna could bring its expertise to operating auto factories, while Onex could use its financial finesse to run Chrysler's credit arm, the sources said.

Onex could also bring a labour-friendly private equity face to the table — many unionized workers made big gains in the company's recent purchase of an aerospace company — in a negotiation where making a deal with unions to cut costs will be key.

The price that Magna and Onex would pay is unclear, according to the sources, who requested that their names not be used, though there have been suggestions that seller DaimlerChrysler AG wants to generate at least $8-billion (U.S.) from a sale. Any buyer would also have to find a way to deal with the massive pension and health liabilities that Chrysler will come with, estimated at more than $15-billion.

DaimlerChrysler put the unit up for sale amid shareholder discontent about the continuing losses since the $36-billion merger of Germany's Daimler and Detroit-based Chrysler in 1998.

Chrysler posted an operating loss of $1.5-billion last year after being sideswiped by a sudden and rapid rise in the price of gasoline, which sent sales of the company's pickup trucks and sport utility vehicles skidding.

The only offer that has been made public so far is a $4.5-billion cash offer from billionaire Kirk Kerkorian.

Investment bankers from JPMorgan Chase & Co. are running the sale process, and the sources said private equity firms Blackstone Group LP and Cerberus Capital Management LP are the other leading bidders.

Magna had also been rumoured to be working with a private equity partner, but the identity of the backer had not been revealed.

There had been speculation that Magna, one of the world's largest auto component makers, would not bid for the whole of Chrysler, but would rather aim for a partnership setup where the Canadian company would run plants and try to use its operational expertise to cut costs.

With Onex on side, a play for all of Chrysler becomes a possibility, the sources said. Onex has spent only about half of the $3.45-billion it raised in a private equity fund last year. Onex officials declined to comment on the possibility of a bid for Chrysler.

Magna could borrow as much as $7-billion to fund a bid, according to a recent report by Citigroup analyst Jon Rogers.

“Potential drivers for Magna's interest might include gaining more business from and solidifying its relationship with an important customer,” Mr. Rogers wrote.

Magna has refused to discuss its plans, other than via Mr. Stronach's public comments that Magna must get involved to protect its relationship with the auto maker, which generates about 15 per cent of Magna's annual revenue of $24.2-billion. Magna makes seats, trim parts, and suspension and engine components for virtually every Chrysler vehicle manufactured in North America, and actually builds cars for DaimlerChrysler at a plant in Austria.

A big hurdle will be making a deal with the auto maker's unions. The Canadian Auto Workers union and the United Auto Workers union have expressed their opposition to the sale of Chrysler.

They have also vocally criticized the prospect of a takeover of the company by private equity firms, because of concerns that a buyout firm will try to institute deep cost cuts.

CAW head Buzz Hargrove has met with Mr. Stronach to hear what the union leader called a “sketchy” outline of a Chrysler proposal.

In an interview yesterday, he reiterated that
__________________
For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you hope and a future. Then you will call upon me and come and pray to me, and I will listen to you. You will seek me and find me when you seek me with all your heart.
Jeremiah 29:11 is offline  
Old 04-11-2007, 07:57 PM
  #2  
Super Moderator
 
Join Date: Jan 2006
Location:
Posts: 4,057
Likes: 0
Received 0 Likes on 0 Posts
Default RE: Onex, Magna eye bid for Chrysler

I'm confused on who to route for on this. All I know is I don't want Blackstone or Cerberus Capital. I think they just want to gut the company. I don't think this is Kirk's intention nor Magna's. I think they both have a vision for the company. I don't care what the UAW thinks. Their only concern is for themselves, not the survival of the company. If they were concerned for the survival of the company, they would be in favor of getting as far away from Daimler as possible. Daimler will get rid of them the first chance they get, if they don't believe that, they should look up a car called the Dodge Hornet. Daimler has no loyality to anyone but themselves.
__________________
"To Debate and Moderate" since 2006

College Graduate:
B.S. in Marketing
A.A. in nothing

The first 426 Dual Quad member.
The first to 2000 posts

RLSH700 is offline  
Old 04-12-2007, 07:41 AM
  #3  
Senior Member
 
Join Date: Sep 2006
Location: China Grove NC.
Posts: 1,681
Likes: 0
Received 0 Likes on 0 Posts
Default RE: Onex, Magna eye bid for Chrysler

I hope the Co. that takes over Chrysler will keep it intact. They are on the verge of building what we have been asking for. The 300C is very popular and the Magnum and Charger are growing in popularity. The Challenger will be over the top. We are americans and we want american cars. But they are just coming up with the technology to give us a compromise of mpg and hp. Again I hope that Chrysler will stay as a Co.
lear4406 is offline  
Old 04-12-2007, 10:56 AM
  #4  
Super Moderator
 
Join Date: Jan 2006
Location:
Posts: 4,057
Likes: 0
Received 0 Likes on 0 Posts
Default RE: Onex, Magna eye bid for Chrysler

That is essentially what I want. I want to see Chrysler return to their glory as one company.
__________________
"To Debate and Moderate" since 2006

College Graduate:
B.S. in Marketing
A.A. in nothing

The first 426 Dual Quad member.
The first to 2000 posts

RLSH700 is offline  
Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
Jeremiah 29:11
Off Topic
4
05-15-2007 12:12 AM
Jeremiah 29:11
Off Topic
1
03-26-2007 08:52 PM
Jeremiah 29:11
Challenger News
3
03-14-2007 01:28 PM
Jeremiah 29:11
Off Topic
3
03-09-2007 11:40 PM
Jeremiah 29:11
Off Topic
1
02-26-2007 05:08 PM


Quick Reply: Onex, Magna eye bid for Chrysler


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service

© 2019 MH Sub I, LLC dba Internet Brands

 
  • Ask a Question
    Get answers from community experts
Question Title:
Description:
Your question will be posted in: