Daimler Chief Braces for Annual Meeting SHAKERS MARKETPLACE By Bloomberg
By Jeremy van Loon
Dieter Zetsche, chief executive of DaimlerChrysler, is likely to face pressure Wednesday from investors seeking progress on the sale of the Chrysler division. Zetsche was hailed at last year’s annual shareholders meeting for increasing sales at Chrysler. The meeting this year in Berlin may be the last for the combined company. Zetsche said on Feb. 14 that “all options are on the table” for Chrysler, which ended 2006 with a loss of $1.5 billion. Shares of DaimlerChrysler have risen 26 percent since that day, but remain about 15 percent below their level before the acquisition.
Jargen Schrempp, Zetsche’s predecessor, purchased Chrysler nine years ago for $36 billion. Analysts say Chrysler is now valued at about $6 billion because the unit has lost market share to Toyota Motor’s more fuel-efficient vehicles. Blackstone Group and Centerbridge Capital Partners plan to bid for Chrysler, people familiar with the talks said Friday.
“We’ve said right from the very beginning that two very different car manufacturers like Mercedes and Chrysler don’t fit together,” said Jargen Grasslin, head of the Critical Shareholders of DaimlerChrysler Association, which voted against the takeover at a special shareholders’ meeting in 1998. “Premium and mass market are incompatible.”
Zetsche, who led the Chrysler unit for five years until September 2005, eliminated 40,000 jobs during his tenure. In February he said another 13,000 jobs would be cut and a factory in Delaware closed.
Grasslin’s group has added a no-confidence motion to the agenda of the Wednesday meeting, saying it told management in 1998 that the union would result in job losses.
In response, the company said at the time that there was “no danger of jobs being destroyed” and that DaimlerChrysler would be “created through the combination of two healthy companies.”
In addition to the 40,000 jobs lost at Chrysler in the past nine years, about 9,000 were cut at Mercedes. Another 6,000 administrative and managerial positions, mainly in Germany, are being eliminated.
Chrysler’s U.S. market share dropped to 12.9 percent last year from 16.1 percent in 1998. Reliance on pickups and sport-utility vehicles contributed to the decline. Consumers in the past two years turned to fuel-efficient vehicles as gasoline rose to $3 a gallon in 2006.
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