Lee Iacocca Speaks Out: "Daimler Screwed Chrysler"
Agent009 submitted on 5/18/2007 Official Bell & Ross Timestamp: 11:22:29 AM
9 user comments | Category: New Cars | Source: | SOURCE: businessweek.com
My phone started ringing off the hook the day Daimler's (DCX) deal to sell Chrysler to Cerberus was announced.
The reactions were mixed. Some people thought it was a hell of a deal. Others thought it was a deal from hell. More than one person mentioned that Cerberus was named after the three-headed monster in Greek mythology that guards the gates of Hades. Mostly, though, the people I talked to wanted it to work because they cared about Chrysler and about the future of the American auto industry.
There's one thing everyone agrees on: Daimler screwed Chrysler royally. To understand how the desperation sale to Cerberus Capital Management could possibly happen to one of America's iconic car companies, you have to look at the history. Chrysler's merger with Daimler-Benz nine years ago was a disaster from the start. At the time, Chrysler was making a lot of money—something like $1 billion every quarter. The minivan was a cash cow. The Jeep Grand Cherokee and Dodge Ram pickup were selling like crazy. There were 4,000 profitable dealers, a brand-new $1.5 billion research center, and $12 billion in cash. Chrysler was the lowest-cost producer and the most profitable car company in the world, with sales of 2.5 million cars and light trucks. But it took Daimler less than a decade to drive Chrysler off a cliff.
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