Chrysler Seeks Balance Amid Sale Rumors

The Associated Press
Friday, February 23, 2007; 10:26 PM

DETROIT -- Whatever was normal inside Chrysler's Auburn Hills headquarters is normal no more as top executives simultaneously try to manage a major restructuring plan while selling cars _ and possibly their company.

A senior Chrysler official said Friday that the company is giving detailed financial information to selected potential suitors and is working with its investment bank, J.P. Morgan Chase & Co., to avoid divulging sensitive information.

The Chrysler official, who spoke on the condition of not being identified because the information is confidential, said the company is assembling a list of potential qualified suitors that the official would not identify.

"It's not an auction," said the official. "There will be some firms that will be allowed in to look at it, and there will be a prospectus that will be presented to them."

Among those that analysts say are exploring a purchase of the struggling company are four private equity firms, plus General Motors Corp.

The equity firms, Apollo Management LP, the Blackstone Group, the Carlyle Group and Cerberus Capital Management LP, all refused comment on Friday. GM also has not commented, although it will not deny reports that it's interested.

Chrysler Chief Executive Tom LaSorda spent the week trying to soothe fears about what would happen to the company, sending out an e-mail to employees asking them to focus on making and selling great cars. He told dealers on a telephone conference call Thursday that the board of Chrysler's German parent, DaimlerChrysler AG, has endorsed the restructuring plan as the path toward a return to profitability by 2008.

Meanwhile, Volkswagen AG spokeswoman Christine Ritz said Europe's biggest automaker was not interested in acquiring money-losing Chrysler if it is put up for sale. The Renault-Nissan auto alliance and Hyundai Motor Co. said earlier they were not interested in buying Chrysler.

Erich Merkle, an industry analyst with the auto consulting company IRN Inc. in Grand Rapids, said it makes little sense for private equity firms to be interested in Chrysler.

"You've got a lot of work to turn something like that around," he said. "Private equity guys like to get a quicker turn on their buck without so much headache."

Merkle, who says Chrysler could be a good value to someone, believes the sale talk is corporate theater on DaimlerChrysler's part, giving the company leverage as it enters contract talks with the United Auto Workers and placating German investors who want to dump Chrysler.

DaimlerChrysler's U.S. shares rose 94 cents, or 1.3 percent, to close at $70.92 on the New York Stock Exchange.

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