There's More to a DaimlerChrysler Deal Than Cash

Washington DC May 7, 2007; The AIADA newsletter reported that the price for the Chrysler Group might not matter as much to DaimlerChrysler AG officials as shedding the division's huge pension and health care liabilities does.

According to the Detroit Free Press, if the German company can get a deal where those liabilities -- which have been estimated to be in the $16.5-billion to $19-billion range -- are eliminated from its balance sheet, it might accept a sale price that on its own would seem low.

The only publicly confirmed offer to buy the struggling Auburn Hills-automaker is for $4.5 billion from Kirk Kerkorian. The investor tried to buy Chrysler during the 1990s, and it seems this offer won't be considered because of his contentious past with DaimlerChrysler.

Analysts had speculated the firms valued the company in the $5-billion to $6-billion range. Peter Morici, a business professor at the University of Maryland, is skeptical that Daimler officials will be able to find a buyer.

"It's going to be hard to find a fool to take them, and only a fool will take the company if it has to take the liabilities because it just doesn't make sense. The math just doesn't work," Morici said.