Lasorda E-Mail On The Unmerger Of Equals
More news from the top on the de-Americanization of the German-American hybrid. Chrysler CEO, Tom Lasorda has followed Dieter with an e-mail of his own, but with less management speak and more nitty-gritty. The shocker here is that Tom tells us there are no further cuts planned and no interruption in the UAW contracts. What? Cerberus will have to actually reorganize the company and make it functional? Weird. He also touches on the topic of DaimlerChrysler Financial, which will apparently be split up in the deal as well. Some speculation is already brewing regarding a possible merger of GMAC and the Chrysler Financial businesses, since Cerberus has control of both. This of course is based on nothing, but that's what makes speculation fun. The contents of the programs representing that 19.9% retained have also come to light, consisting of...
..."clean diesel engines, two-mode hybrids, fuel cells and other alternative powertrains that are especially important in this climate of rising consumer demand for more fuel-efficient vehicles. Other ongoing joint projects with Mercedes-Benz also will continue." So now I guess even though we'll no longer have a German-American hybrid, we will still have German-American Hybrids.
Dear Colleagues,
We are very pleased about the news today that DaimlerChrysler has signed a definitive agreement to sell Chrysler Group, including Chrysler Financial, to Cerberus Capital Management, L.P. I would like to take this opportunity to discuss this exciting news and what it means for the future of the Chrysler family.
We are confident that this transaction will create a stand-alone Chrysler that is financially stronger, with a winning combination of people, industry know-how, operational expertise and spirit of innovation that will accelerate the company's recovery and help us regain our position as a competitive industry leader.
As you know, DaimlerChrysler looked long and hard for the right partner for Chrysler in a competitive marketplace. We are confident that Cerberus is the right strategic buyer for Chrysler, with a long-term commitment to our growth and success. Cerberus has expressed great confidence in and respect for the people of Chrysler and our leadership team, and is committed to working constructively with both union leadership and Chrysler's management team to help us realize our full potential.
As a private (non-public) company, we will be better positioned to concentrate on our long-term plan for recovery, rather than on short-term results. With the financial strength and additional operational expertise brought by our investment partner Cerberus, Chrysler will renew its focus on what has always made us special: the passion, creativity and commitment of our employees, suppliers and dealers to delivering exciting Chrysler, Jeep and Dodge vehicles and quality Mopar parts to our customers.
The finance arm — DaimlerChrysler Financial Services Americas — also is affected by this decision. The most important piece of information is that Chrysler Financial will continue to support us and our dealers. However, the framework for DCFS will change. The company will be split up into two legal entities with Chrysler Financial as one company and Mercedes-Benz and DaimlerChrysler Truck Financial as another.
Our future success will be supported by our continued relationship with Daimler. We will continue to work together on technologies to bring even better products to our customers. In particular, we will continue to collaborate on technologies for clean diesel engines, two-mode hybrids, fuel cells and other alternative powertrains that are especially important in this climate of rising consumer demand for more fuel-efficient vehicles. Other ongoing joint projects with Mercedes-Benz also will continue.
For those of you who may not be familiar with Cerberus, it is one of the leading private investment firms in the world, with approximately $23.5 billion under management in funds and accounts. Currently, Cerberus has significant investments in more than 50 companies that, in aggregate, generate more than $60 billion in annual revenues worldwide, including Air Canada and GMAC. Cerberus is highly respected for its long-term investment horizon and focus on value creation. In addition, Cerberus has a team of experienced operational professionals that includes industry veterans with management backgrounds in the automotive industry.
You should know that there are no new plans — other than those previously announced — to reduce headcount. There are no additional job cuts planned in connection with the transaction announced today. This announcement also will not impact the provisions of the early retirement and buyout packages previously announced.
Additionally, we do not foresee any impact on current union contracts; all of the collective bargaining agreements remain in place, and the upcoming negotiations will take place as scheduled. Cerberus has worked together with unions in the past, and recognizes the important role they play for Chrysler.
The transaction is expected to close this summer. In the meantime, we will continue to operate under the vision established by the Recovery and Transformation Plan (RTP), which will return us to profitability in 2008 and will deliver 2.5 percent return on sales by 2009. There are several forward-looking elements in the RTP that take into account the realities needed to succeed in the global marketplace. We must grow our brands with strong, customer-focused products. We must defend our areas of strength in the North American markets, while growing internationally. And we must continue to build with alliances, partnerships and innovative approaches to our business challenges.
Also attached to this message is a Q&A document with answers to other questions you may have today. In addition, you should expect frequent communication from the leadership team as this process moves forward.
As a stand-alone company, with strong backing from Cerberus, we must demonstrate once and for all that we can win in this global marketplace. It is ours to win. And we have it in our DNA to do just that.
On a personal level, as a fourth-generation Chrysler employee, this is a dream come true for me to be given an opportunity to work with you to restore Chrysler back to greatness. It will take hard work, but I know that I can count on you to do whatever it takes to get the job done.
Sincerely,
Tom