VW Isn't Interested In Buying Chrysler...

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Associated Press
VW: We're Not Interested in Chrysler
By MATT MOORE 02.23.07, 8:06 AM ET

If DaimlerChrysler AG is seeking a buyer for its struggling Chrysler Group, its choices among its counterparts is shrinking - but it may be drawing interest from several private equity groups.

Other automakers have been ruling themselves out, the latest being Germany's Volkswagen AG, after the Renault-Nissan auto alliance and Hyundai Motor Co. said earlier they were not interested in the American side of the world's fifth-largest automaker.

Christine Ritz, a spokeswoman for Wolfsburg-based Volkswagen, said Friday that Europe's biggest automaker was not interested in acquiring the unit, if it is indeed put up for sale.

DaimlerChrysler AG, which said last week that all options were on the table for its U.S. division, is planning to offer detailed financial information about Chrysler only to selective buyers, The Wall Street Journal reported Friday.

The car maker and its investment bank, JPMorgan Chase & Co., are working together to explore a sale, the paper reported, citing only people familiar with the matter.

Meanwhile, at least four private-equity groups have had preliminary talks about buying Chrysler, according to a report in the Financial Times newspaper.

Apollo Management, the Blackstone Group, Carlyle Group and Cerberus Capital Management, along with several European private-equity groups, were contacted about a potential buyout before DaimlerChrysler announcement, the newspaper said, also citing people familiar with the matter.

DaimlerChrysler had no comment Friday. The company has kept mum since announcing last week that it had not ruled out any options for Chrysler - which, until a year ago, had kept the automaker profitable amid quality issues at the Mercedes Car Group.

But a failure to discern American consumers' changing tastes for more fuel-efficient models instead of light trucks led the German-American automaker to announce plans to eliminate 13,000 jobs in the U.S. and Canada, or about 16 percent of its work force, and shutter a plant in Delaware in a bid to shave costs.

Chairman Dieter Zetsche, who brought Chrysler back from the brink before taking over the entire company at the beginning of 2006, has said that all possibilities were open for the Auburn Hills, Michigan-based unit.

DaimlerChrysler's fourth-quarter earnings plunged 40 percent on weaker demand at the Chrysler unit, where sales fell 7 percent. Chrysler had an operating loss of euro1.12 billion ($1.47 billion) for the year, compared to a profit of euro1.53 billion in 2005.

Chrysler Group Chief Executive Tom LaSorda told the company's U.S. and Canadian dealers on Thursday that Chrysler will make it through the current tough times.

He said the company will continue to invest $5.7 billion (euro4.35 billion) to $6 billion (euro4.58 billion) per year on future products, rolling out 20 all-new vehicles during the next three years and 12 updated ones between now and 2009.

"Do these sound like the actions of a company uncertain about its future?" he asked. "Obviously not."

Shares of DaimlerChrysler were down more than half a percent to euro52.90 ($69.33) in Frankfurt trading while Volkswagen shares fell 0.1 percent to euro94.69 ($124.10).

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