The most explosive news this week is that Cerberus buys Chrysler. The focus of media finally has a happy ending.
There are also other big newsmakers. Magna missed Chryler and it also missed the big contract with BMW. Isuzu reaps the 2006 F/Y but predicts that the new year will slip. GM is mulling a sale of its relatively modest medium-truck business to Navistar. GM CEO Wagoner sees possible alliance between GMAC and Chrysler Financial.
The hot news this week are as follows:
Isuzu Motors posts record opg profit on strong overseas sales
From:AFX News May 15 2007
Isuzu Motors Ltd reported its operating profit for the past year to March rose 18 pct to a record 106.98 bln yen, bolstered by brisk overseas sales, especially in Asia.
But Japan's largest truckmaker by sales said weak domestic demand for new trucks will see operating income fall in the current fiscal year.
Net profit rose 56.7 pct to an all-time high of 92.39 bln yen for the year ended March as revenue gained 5 pct to 1.66 trln yen.
'We managed to log record profits as overseas sales expanded rapidly thanks to brisk sales of our trucks in resource-rich nations,' Isuzu president Yoshinori Ida told a news conference.
Overseas sales increased 6.7 pct to 372,000 units for the past financial year, while domestic sales tumbled 1.4 pct to 97,000.
DCX reaches deal with Cerberus
From:freep May 15 2007
Cerberus, a New York City fund with several ties to the auto industry already, will pay $7.4 billion for an 80% stake in the maker of Chrysler, Dodge and Jeep brand vehicles.
DaimlerChrysler AG plans to change its name to Daimler AG, focus on its Mercedes luxury brand, and retain about 20% of Chrysler, the company announced.
Of the $7.4 billion Cerberus is spending on the transaction, $5 billion will go into the newly created Chrysler Corp. LLC and $1.05 billion will go into Chrysler Financial Services “to strengthen the equity base of both businesses.”
Daimler will give the new Chrysler a $400 million loan.
Navistar wants GM's medium truck division
From:chicagotribune May 16 2007
Navistar International Corp. is declining comment on a published report that suggests the Warrenville truck and diesel-engine maker is interested in acquiring General Motors Corp.'s medium-duty truck operation.
The Flint (Mich.) Journal, citing unnamed sources, reported Sunday that GM is mulling a sale of its relatively modest medium-truck business to Navistar.
The report quoted a United Auto Workers official as saying the union is "aware of these ongoing talks between the two parties," although the UAW hasn't yet received any formal information about the rumored transfer. And it quoted unnamed plant workers who said Navistar employees "have been in the Flint facility" where GM makes its medium duty trucks.
Chrysler loss near $2 billion, mostly on restructuring
From:freep May 16 2007
For the first three months of the year, the Chrysler Group this morning posted a loss of near $2 billion.
The size of the loss is in large part due to restructuring charges of $1.2 billion, DaimlerChrysler said in a statement.
The U.S. unit is undergoing a turnaround plan that includes eliminating 13,000 jobs. It lost $1.5 billion last year, a figure restated to $680 million because of a change in accounting procedures.
It was announced Monday that the Auburn Hills-based unit of DaimlerChrysler is being sold to a private equity firm called Cerberus Capital Management.
A year ago, the Chrysler Group made $857 million in earnings before interest and taxes during the first quarter.
DaimlerChrysler expects Chrysler to lose $2.1 billion in 2007, including $1.3 billion in charges for the recovery plan unveiled in February, the company said this morning.
Overall DaimlerChrysler AG earned $2.7 billion in the first quarter compared to $1.6 billion in the first quarter of 2006.
BMW decision costly for Magna's Austrian operation
From:theglobeandmail May 17 2007
BMW AG plans to shift some production of its X3 sport utility vehicle from a Magna International Inc. plant in Austria to the auto maker's own plant in South Carolina in a move that is likely to create a major hole in Magna's vehicle assembly operations.
Losing all X3 production could cost Magna more than $2-billion (U.S.) in revenue based on last year's vehicle sales of 113,000, which represented more than 45 per cent of the 240,000 vehicles built at the MagnaSteyr assembly complex in Graz, Austria. Magna reported assembly revenue of $4.4-billion last year.
Because of the X3, MagnaSteyr ran virtually flat out last year. The assembly operation also produces vehicles for DaimlerChrysler AG and the Saab division of General Motors Corp.
But the Chrysler group is shifting production of minivans out of Graz later this year, which represents another 25,000 or so vehicles that will need to be replaced.
GM's Wagoner sees possible GMAC Financial-Chrysler Financial alliance
From: Automotive News May 18 2007
General Motors CEO Rick Wagoner says there are opportunities for GMAC Financial Services and Chrysler Financial Services to work together.
Private equity firm Cerberus Capital Management LP owns a 51 percent stake in GMAC, and it has agreed to pay $7.45 billion for the Chrysler group,including Chrysler Financial.
Wagoner says Cerberus has been a good partner so far with GMAC, adding that it will be a good partner for Chrysler Corp., too. He sees opportunities for GMAC to work with Chrysler Financial in the future.
"There are potential synergies and a lot of different ways to think about it," Wagoner said at a luncheon today here for Inforum, a Michigan professional women's group. "As of yet, nothing has been specifically presented to us, and we haven't developed any ideas, but I'm sure that will be happening over time."