Chrysler Group President Tom W. LaSorda, Cerberus Capital Management Chairman John W. Snow and DaimlerChrysler CEO Dieter Zetsche at yesterday's announcement of the sale of Chrysler Group to the private-equity company.
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"These brands [Chrysler, Jeep and Dodge] will stay together and won't be broken up under any circumstances," he told reporters at a media briefing at Chrysler Group headquarters in Auburn Hills, Mich.
Cerebus to acquire 80.1%
German parent DaimlerChrysler announced yesterday it has a deal to sell 80.1% of Chrysler to Cerebrus for $7.4 billion. The deal is expected to be finalized in the third quarter and marks the end of what had been hailed with much fanfare in 1998 as a "merger of equals."
While accepting responsibility today for Chrysler Corp.'s disastrous 2006 buildup of unsold inventory unordered by dealers, Mr. LaSorda admitted he was under pressure from Stuttgart to meet quarterly sales targets set by DaimlerChrysler.
He said that by the deal's closes, a new management structure will be decided. In consideration is whether to name a non-executive chairman of the new Chrysler Holding, in which DaimlerChrysler will hold a minority stake of 19.9%. Mr. LaSorda will become president-CEO of the future Chrysler Corp. under the privately held holding company, which includes the automotive business and a financial-services business.
Since it will be a private company, Chrysler Corp. will no longer have to report its quarterly financial data, vehicle sales or unsold new-vehicle inventory.
Former COO Bernhard
Mr. LaSorda said former Chrysler Group Chief Operating Officer Wolfgang Bernhard will not be on Chrysler's management team, but will remain with Cerebus. "I will use him when I need him. I'd be crazy not to," he said.
Mr. Bernhard left Volkswagen AG early this year and was hired by Cerebus a couple of months ago as an adviser in its pursuit of Chrysler.
Mr. LaSorda tried to ease predictions that Cerebrus would "tear things apart. That's absolutely not going to happen." He added that no additional job cuts "are planned at this time."
Cerebrus has endorsed Chrysler Group's three-year recovery plan, laid out in February, as well its future product plans, he said. Under that plan, Chrysler Group plans to cut its white- and blue-collar staff by 16%, or 13,000 employees, including 9,000 blue-collar workers in the U.S.
Mr. LaSorda called the new deal a "new chapter in this great company's history."