Daimler: Chrysler’s not worth anything
The German automaker has depreciated its stake in Chrysler to zero from $268 million at the end of June, the company said Thursday. A little over a year ago, the company valued its 19.9% stake in Chrysler at $2.2 billion.
The announcement came as part of Daimler's quarterly financial release on a day when Consumer Reports scolded the Auburn Hills automaker's quality and Chrysler announced plant cuts that will halt hybrid vehicle production — all as majority owner Cerberus Capital Management talks with General Motors Corp. about a merger that could result in 30,000 job cuts.
Chrysler indicated Thursday that it had a net loss of $662 million in the second quarter of this year, meaning the automaker and its financing arm, Chrysler Financial, lost more than $1 billion in the first half of the year. The bulk of the $662-million losses — $572 million — was attributed to the automotive business.
The Auburn Hills automaker announced it will close its Newark, Del., assembly plant a year earlier than expected and eliminate a shift at its Toledo North Assembly Plant, cutting 1,825 jobs between the two.
"The pain level must be extraordinary over there — Cerberus and Chrysler and Daimler. You can just imagine how tortured they are," said Gerald Meyers, a University of Michigan business professor and former American Motors chairman.
Daimler officials said they continue to negotiate with Cerberus for the private equity firm to acquire its final stake in Chrysler.
Combined with previous statements, Thursday's announcement indicates that Chrysler's automotive and financing businesses lost $1.17 billion through the first half of the year. During the same time, Ford Motor Co. lost $8.6 billion while General Motors Corp. lost $18.7 billion. Detroit Free Press