DCX CEO: Chrysler Renewal Plan Will Work

GENEVA March 6, 2007; Matt Moore writing for the AP reported that DaimlerChrysler AG Chief Executive Dieter Zetsche said Tuesday he is confident the plan to re-energize Chrysler will work, but reiterated that all options for the unprofitable U.S. division were still being considered.

"I'm sure we will see a rebound of Chrysler," Zetsche said on the sidelines of the 77th annual Geneva Motor show, though he offered no timetable. "We're very confident that the (restructuring plan) is robust and doesn't require further steps."

However, he acknowledged that DaimlerChrysler underestimated the time it takes to completely change the impression of brands in the U.S. marketplace. "It takes years to change the perception of a company," he said.

In the roundtable interview, Zetsche said he could not, and would not, comment on DaimlerChrysler's exploration of alternatives for Chrysler.

But he did say that the German-American automaker and General Motors Corp. have started talks on joint-development plans for future products.

GM Chief Executive Rick Wagoner refused to discuss the specifics of those talks, saying: "I will leave that to Zetsche."

Buyout experts from two private equity firms are meeting this week with Chrysler Group executives about possibly making a bid to buy the struggling U.S. unit, a company official said Tuesday.

The official, who did not want to be identified because the talks are confidential, told The Associated Press that Cerberus Capital Management LP representatives visited the company's Auburn Hills headquarters Monday to review the automaker's finances, while Blackstone Group officials are to arrive later in the week.

Zetsche said Feb. 14 that all options are on the table for the money-losing Chrysler business and he would not rule out a possible sale.

Chrysler in February announced that it lost 1.12 billion euros ($1.48 billion) in 2006 and said it expects losses to continue through 2007. Parent DaimlerChrysler, however, earned 3.24 billion euros ($4.26 billion) in 2006.

The Chrysler losses were accompanied by the announcement of plans to shed 13,000 jobs, including 11,000 production workers and 2,000 salaried employees as Chrysler trims expenses and factory capacity as sales decline.

"When we made the announcement Feb. 14 we were aware that there would be some media reaction and were aware that some pressure would be building to give a timeline," Zetsche said, adding the company remained focused on the turnaround.

"Whatever the development we are focusing on this plan," he said.

On Monday, Zetsche said that the finance arm of Chrysler could be sold. The comment came at the Merrill Lynch Global Automotive Conference and Zetsche cited the move as an outside example of how costs could be trimmed.

"In case we would decide for an option that would change the current structure for the Chrysler Group, we have the option to do the same for the financial arm or not," Zetsche said during the conference, which was broadcast on the Internet.

Last year, GM sold its majority stake in its General Motors Acceptance Corp. to a group led by Cerberus.