Daimler Optimistic After Chrysler Sale

STUTTGART, Germany - Daimler AG chief executive Dieter Zetsche said his company is in very strong shape after splitting from Chrysler, and suggested the danger of becoming a takeover target has eased.

Zetsche told The Associated Press that the automaker has no plans to reduce its remaining stake in Chrysler. In an interview at Daimler's Stuttgart headquarters, he also said future acquisitions are a possibility.

Daimler earlier this year sold 80 percent of Chrysler to private equity firm Cerberus Capital Management LLC for $7.4 billion, ending a nearly nine-year merger. That paved the way for a streamlined Daimler to concentrate on its luxury Mercedes brand and its truck business.

Zetsche argued that a recent increase in his automaker's market value has removed a "significant motivation" for any potential investor to try to step in and change the company's direction.

Daimler shares closed at 66.59 euros, or $97.63, in Frankfurt Tuesday; the stock started the year below the 48-euro mark.

It is "not impossible that someone with interests different from those of the management might want to take a stake in this company, but ... the likelihood of that is significantly smaller," he said.

"We are a healthy company with a very strong balance sheet," Zetsche said. He stressed that, as well as achieving progress in productivity, "the growth side also is relevant for us."

Daimler posted a loss of $2.24 billion at current rates in the third quarter -- its first since 2003 -- after charges of $3.8 billion from the Chrysler deal offset gains by its Mercedes group. However, analysts and markets had expected the loss and were cheered by the otherwise solid performance.

Excluding the charges related to Chrysler, the company said it would have posted a profit of $1.6 billion.

For now, "natural growth stands at the forefront," Zetsche said, adding, however, he did not rule out the possibility of acquisitions.

"Such steps are somewhat likelier in the commercial vehicle sector than in the car sector," Zetsche said.

Zetsche made clear that Daimler would not look at investing in a mass automaker, but did not otherwise elaborate on possible segments in which Daimler might invest. The company pointed to areas such as fuel cells, where Daimler recently acquired a majority stake in Automotive Fuel Cell Cooperation, a Canada-based think tank. Fuel cells are among the alternative-fuel technologies being explored and developed by most major automakers.

The former Daimler-Benz and Chrysler Corp. linked up in 1998 in a $36 billion deal described as a marriage made in heaven by then-CEO Juergen Schrempp, but up-and-down earnings and repeated cost-cutting soured many investors on the effort to create a global auto giant.

The German company in May announced the sale, under which it retained a 19.9 percent stake in Chrysler and continued to work with it on drive systems, purchasing, sales and financial services outside North America.

"We have today, in the top management on both sides, a clear interest in continuing the cooperation" -- and possibly in expanding it should opportunities arise in future, Zetsche said.

The remaining Daimler stake in Chrysler is consistent with that cooperation and there are no plans to change it, he added.

In addition to the Chrysler sale, this year has seen Daimler wrap up a 2 1/2-year program to restore the luster of its core Mercedes Car Group.

Turning to next year's outlook for world auto markets, Zetsche said Daimler sees them "growing somewhat less than this year, but still attractively."

The U.S. market is likely to decline while Europe and Japan will remain stable. Growth elsewhere in Asia, the Middle East and South America will compensate.