Posted on 04/27/2009 3:46:51 PM PDT by traumer
German carmaker Daimler has reached a deal to give up its 19.9% stake in Chrysler, the company has said.
The deal, which will also see Daimler forgive Chrysler's outstanding loans, marks a definitive separation of the German and US firms, Daimler said.
Daimler bought Chrysler in 1998 but sold most of the loss-making unit to Cerberus Capital Management in 2007.
Earlier, Chrysler announced a cost-cutting deal with its main US union as it tries to restructure its business.
The struggling Detroit carmaker has until 30 April to complete its restructuring in order to gain further state loans, without which it may have to enter bankruptcy protection.
Chrysler has already received a $4bn loan from the US government.
Loans written off
Daimler had previously written down the value of its Chrysler stake to zero.
The loans it extended to Chrysler when it sold the company had already been written off in its 2008 financial statements, Daimler said.
Under the deal, Daimler has also agreed to pay three annual instalments of $200m (£137m) into Chrysler's pension plans.
"In this way, Daimler is helping to secure pension payments to former employees of DaimlerChrysler," it said in a statement.
In exchange, Chrysler and Cerberus have agreed to waive any claims against Daimler, including the accusations made in 2008 that Daimler allegedly improperly managed certain issues and provided incomplete information over the 2007 sale of Chrysler.
Daimler said it expects the agreement to reduce its second quarter earnings by about $700m.
(Excerpt) Read more at news.bbc.co.uk ...
This is the equivalent of old furniture that is so worthless that you have to pay someone to haul away.
Daimler sure took a hosing on it’s entire Chrysler misadventure.
I foresaw this approximately 20 yrs ago. When American cars were sold, known to be inferior; and the Big 3 felt that Americans should just pay them money, and shut up. Remember the 3 Cylinder Chevy Spirit? The Chevy Monza?
American car companies DID NOT lose to Japan. They drove people like me to Japan, throwing rocks and beating us with sticks. My Chevy Monza went through 2 engines and was on it’s second transmission when I finally abandoned it with 80,000 miles. When I could least afford it, Chevy, Pontiac and Chrysler gave it to me - hard and without mercy.
I now make a very comfortable living. I drive nothing but Toyota and Honda products. My Lexus had 297,000 miles when I sold it, my old Toyota pickup had 192,000 when I upgraded to my Tacoma (with 92,000). They have all been absolutely trouble free, and completely dependable. I will never again be forced to beg and plead with a car company that refuses to listen. Japanese car dealers do not treat me like a bad smell coming from behind a closed door.
It’s been a long time coming - but this was completely predictable. Poor product, poor service for a couple decades opened the door for superior cars to flood the market. Consumer Reports confirms what we already know. I for one, have no sympathy what so ever.
2009 and only 1 additional Lexus later I'll swear I won't be buying either GM or Ford again.
You aren’t a patriot. Now that Obama owns GM, it is your DUTY to buy GM products.
The way Obama does things, it won't be a DUTY, it'll be a legal obligation. With penalties for noncompliance.
The Mexican Drug Lords will be smuggling Toyotas and Hondas across the border. Muslim thugs will be doing the same for Mazdas and Hyundais across the Canukistan frontier.
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