How many Chryslers?
Truly the Daimler-Benz purchase of US-automaker Chrysler in 1998 was a stupefying disaster. Through the alchemy of its business acumen, Daimler management transmuted the value of Chrysler from an estimated $40 billion to a value of, to judge from the current bidding, around $5 billion, give or take a few hundred million. That's a loss of $35 billion or 87% of the Chrysler original value to Daimler shareholders. (And that's being kind - it doesn't take into account either inflation or the drop in the dollar versus the euro.
Note that Daimler is also retaining some US auto financing assets, so it's not quite so bad.
The whole thing makes the AOL-Time-Warner deal look not so bad. And the current bidding war can't be helping already slumping sales, as consumers fear Chrysler's auto brands may go the way of the Plymouth.
Now of course, it can be argued that such issues as underfunded pensions, spiraling health costs, and a general drop-off in US carmaker's sales (it's notable that Toyota just took over the #1 spot in the industry). But Daimler should have foreseen the first two, and the near lack of innovation in the US division falls squarely on executive mismanagement. One might say that Chrysler stockholders though it would get German engineering and American marketing; instead it got mostly American engineering and German marketing.
But some good can come out of the merger. Based on what seems to be the approximate price of the company, we will describe big mergers and acquisitions henceforth in terms of Chrysler unit, that is to say, in $5 billion increments. For example:
