"Yvonne " <[EMAIL PROTECTED]> writes:
Well, when the Euro kicks in and Germany's huge unemployment problem starts
to cause minor European quakes, your Chrysler stock will be flushable.
Caveat Teutonicus.
-----Original Message-----
From: Ronald Helm <[EMAIL PROTECTED]>
To: Law-Issues <[EMAIL PROTECTED]>
Date: Thursday, May 07, 1998 12:49 PM
Subject: L&I Daimler/Chrysler
>"Ronald Helm" <[EMAIL PROTECTED]> writes:
>
>
>Now this is big time news! I wondered why my Chrysler stock jumped 10
>points yesterday, now I know. Rin
>
>Chrysler, Daimler-Benz Agree to Merge
>
>
> By John Hughes
>AP Business Writer
>Thursday, May 7, 1998; 9:12 a.m. EDT
>DETROIT (AP) -- Chrysler Corp. is being acquired by Germany's Daimler-Benz
>for more than $38 billion in stock in a deal that will reshape the
>automaking industry and give both companies a bigger stake in the global
>market.
>The new company, DaimlerChrysler, combines a German luxury car maker with
>the No. 3 U.S. automaker which once used a ``Buy American'' slogan and is
>now known for Jeeps, minivans and light trucks.
>The agreement was formally announced today and the deal would rank as the
>biggest industrial merger ever.
>At a joint news conference in London this morning, chairmen of both
>companies said the deal increases their potential for growth.
>``Together we believe the potential is literally unlimited,'' Chrysler
>Chairman Robert J. Eaton said.
>Companies in Profile
>Chrysler
>Business: Researches, designs, makes and sells cars, trucks and related
>parts and accessories
>Brands: Chrysler, Dodge, Plymouth, Eagle and Jeep
>Based: Auburn Hills, Mich.
>Established: 1925
>Employees: 121,000
>1997 sales: $58.62 billion
>1997 net income: $2.81 billion
>Yesterday's closing stock price: $48.81D, up $7.37A
>Web site address: www.chryslercorp.com
>
>Daimler-Benz
>Business: Makes, markets and sells luxury cars, trucks and other vehicles;
>also provides aerospace and defense services, as well as financial services
>Brands: Mercedes-Benz, Freightliner Trucks
>Based: Stuttgart, Germany
>Established: 1885
>Employees: 290,000
>1997 sales: $69.26 billion*
>1997 net income: $4.49 billion*
>Yesterday's closing stock price: $99, up $7.23Q
>Web site address: www.daimler-benz.com
>
>*Converted to U.S. dollars using Dec. 31 exchange rate
>SOURCES: Bloomberg News, company reports
>
>
> Eaton predicted that the merger is just the beginning as the auto industry
>continues to become more global. ``We are leading a new trend we believe
>will change the future, the face of the industry,'' he said.
>No plant closures or layoffs will result from the merger, Daimler-Benz
>Chairman Juergen E. Schrempp said.
>``On the contrary, we estimate with the combined strength we will grow, we
>will add volume and we will be creating jobs on both sides of the
>Atlantic,'' he said.
>The merger, Schrempp said, creates ``the world's leading automotive company
>for the 21st century ... one that will set the pace in the automotive world
>in the next millenium.''
>Also this morning, German television ZDF quoted Schrempp as saying
>DaimlerChrysler will have joint management for three years, then Schrempp
>will take over and Eaton will step aside.
>The merger will give Chrysler greater access to the European market,
>something it has strived for.
>And since two of every three vehicles that Chrysler makes is a light truck,
>the German company may very well participate in the popular pickup and
>minivan segments that haven't made as much sense for a luxury brand.
>Some analysts doubted that dealerships will sell Mercedes-Benz models
>side-by-side with Chrysler minivans, however.
>Eaton said the companies complement each other perfectly, and will
>``maintain the current brands and their distinct identities.''
>Directors of both companies have approved the deal, which is expected to be
>completed by the end of this year if approved by shareholders, the
>Daimler-Benz supervisory board and government regulators.
>The transaction sets an exchange ratio of 0.547 Daimler-Benz shares for
each
>Chrysler share, leaving Daimler-Benz shareholders in control of 57 percent
>of the new company and Chrysler shareholders with the rest.
>At Wednesday's closing Daimler price, that means Chrysler shareholders will
>get about $59.38 a share in stock for each of their shares. With 645.5
>million shares outstanding, that values Chrysler at about $38.3 billion.
>DaimlerChrysler will be jointly led by Eaton and Schrempp. The new company
>will have two headquarters -- in Auburn Hills, Mich., and Stuttgart,
>Germany -- and will employ 422,000 people worldwide.
>No plant closures or layoffs were planned, the companies said.
>Analysts praised the plan, but said joining Chrysler with the largest
>industrial company in Germany was no simple matter.
>``The footprints of these companies are totally different,'' said David
>Healy, an analyst with Burnham Securities Inc. ``Management culture is
>different.''
>While the company that owns Mercedes-Benz is highly structured and formal
in
>its management, Chrysler prefers a more freewheeling environment.
>``A moderate amount of culture clash is healthy if managed well. One of the
>benefits of a merger can be learning from each other, if the two sides can
>do something better than either could do on its own,'' said Mitchell Lee
>Marks, a independent management consultant in San Francisco.
>Analysts said a deal makes sense. The companies could blend research and
>development arms to speed products to market, save costs and even use the
>same vehicle frames to create Mercedes and Chrysler vehicles.
>Phil Gott, an analyst at DRI McGraw-Hill, said U.S. car sales will grow
very
>slowly, if at all, over the next five years.
>``So in order to grow their business, Chrysler does need to go global, and
>Mercedes gives them access to Europe and other parts of the world quite
>easily,'' he said.
>The companies together will form a much greater industry presence. If
wholly
>merged, they would have had revenues of $131 billion last year -- $70
>billion for Daimler-Benz and $61 billion for Chrysler.
>By comparison, No. 1 world automaker General Motors Corp. had nearly $178
>billion in revenue last year and No. 2 Ford Motor Co. had $154 billion.
>The move marks a stark change from Chrysler officials' past advocacy of
>``Buy American,'' especially prevalent after the company went to the brink
>of bankruptcy in 1979 before a government bailout.
>Chrysler is a powerhouse in the United States, with 94,300 employees and a
>16 percent share of new vehicle sales this year. Only GM and Ford sell
more,
>with shares of 31 percent and 24 percent, respectively.
>Daimler produces luxury autos, trucks and buses via its Mercedes-Benz
>division. Other Daimler divisions are involved in areas like aerospace,
>defense and financial services; today's statement said only that the merger
>will allow those businesses to grow and pursue expansion strategies.
>Mercedes-Benz has increased U.S. sales 67 percent this year with the help
of
>its hot-selling M-Class sport utility vehicle. But the automaker accounts
>for little more than 1 percent of U.S. auto sales so far this year.
>Similarly, Chrysler sold only 17,713 vehicles outside North America last
>month, more than half of that in Europe. It sold nearly 221,000 vehicles in
>the United States last month.
>
>© Copyright 1998 The Associated Press
>
> To succeed in politics, it is often necessary to rise above your
>principles.
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