DaimlerChrysler bosses favour GM deal as best for Chrysler's future
26 February 2007

General Motors is likely to become the new owner of the Chrysler Group. That's according to reports in the financial press today, which suggest that DaimlerChrysler bosses and investors would be happy with a deal that included a significant shareholding in GM in return for Chrysler.It's almost two weeks since DaimlerChrysler boss Dieter Zetsche made it known that DC was considering 'all options' to secure a profitable future for both the German and American arms of its business. Over that time, several possibilities have been mooted. Hyundai was linked with a Chrysler Group buyout and then publicly distanced itself from the sale. Several Chinese car manufacturers were also reported to be preparing bids, as were various private equity firms in the US.The reason DC bosses are reported to favour a deal with GM is that the General knows what it takes to run a global car company, and has sufficient industrial capital, both in the States and elsewhere, to make the cost savings necessary to turn Chrysler's business around. The Chrysler Group made a loss of £737 million last year; greater economies of scale and far-reaching production tie-ups will be essential parts of its recovery.One of DaimlerChrysler's shareholders told the Financial Times that DC bosses 'are interested in who takes Chrysler over and they would be happy to take equity in GM in return.'

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