No more Evos and everything else?
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From: Fraser
DaimlerChrysler Pulls Plug on Mitsubishi
1 hour, 36 minutes ago Add Business - Reuters to My Yahoo!
By Alexander Huebner and Chang-Ran Kim
STUTTGART/TOKYO (Reuters) - DaimlerChrysler AG will no longer bankroll Mitsubishi Motors and may sell its stake, leaving the German auto giant's global strategy in disarray and the future of the ailing Japanese firm in doubt.
Reuters Photo
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Chief Financial Officer Manfred Gentz said on Friday that the Stuttgart-based company failed to agree with other Mitsubishi group shareholders on a bailout plan for Mitsubishi Motors Corp and would not provide any new funds.
DaimlerChrysler shares shot higher as investors expressed relief at what appeared to be the end of its costly entanglement with Japan's only unprofitable carmaker. They were up 6.7 percent at 38.5 euros.
Several brokers upgraded the stock.
"It's a great news that they've stopped pumping money into Mitsubishi, they are fighting on so many fronts already and it was never an important focus," said Gerald Roessel, a fund manager at Invesco Asset Management in Frankfurt. "It was high time that they stepped on the emergency brakes."
Gentz said DaimlerChrysler would not decide on the fate of its 37 percent stake until the details of a restructuring plan led by three other Mitsubishi group firms -- who own 23 percent of Mitsubishi Motors -- were clear, but a sale was possible.
"We may reclassify our participation from at equity to available for sale," he said in a conference call held to explain the strategy U-turn agreed by management and supervisory boards late on Thursday.
Anticipation of a bailout had lifted Mitsubishi Motors' shares by 34 percent this month. The shares were suspended for much of the day, and met a wave of selling when the suspension was lifted, closing 25 percent down at 241 yen ($2.21).
DaimlerChrysler bought the Mitsubishi stake for 405 yen per share in 2000, with a view to expanding in Asia. The deal was engineered by Chief Executive Juergen Schrempp, who dreamt of building a global automaker.
Schrempp, who has presided over the loss of some 37 billion euros ($43.97 billion) in market capitalization since Daimler merged with Chrysler in 1998 and faced calls to resign at a shareholder meeting two weeks ago, was not available to comment.
ASIA STRATEGY UNDER REVIEW
His finance chief said he saw no reason for an immediate writedown of the Mitsubishi stake, whose market value is roughly equivalent to book value at the end of 2003, but could not specify the decision's impact on 2004 results.
1 hour, 36 minutes ago Add Business - Reuters to My Yahoo!
By Alexander Huebner and Chang-Ran Kim
STUTTGART/TOKYO (Reuters) - DaimlerChrysler AG will no longer bankroll Mitsubishi Motors and may sell its stake, leaving the German auto giant's global strategy in disarray and the future of the ailing Japanese firm in doubt.
Reuters Photo
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Chief Financial Officer Manfred Gentz said on Friday that the Stuttgart-based company failed to agree with other Mitsubishi group shareholders on a bailout plan for Mitsubishi Motors Corp and would not provide any new funds.
DaimlerChrysler shares shot higher as investors expressed relief at what appeared to be the end of its costly entanglement with Japan's only unprofitable carmaker. They were up 6.7 percent at 38.5 euros.
Several brokers upgraded the stock.
"It's a great news that they've stopped pumping money into Mitsubishi, they are fighting on so many fronts already and it was never an important focus," said Gerald Roessel, a fund manager at Invesco Asset Management in Frankfurt. "It was high time that they stepped on the emergency brakes."
Gentz said DaimlerChrysler would not decide on the fate of its 37 percent stake until the details of a restructuring plan led by three other Mitsubishi group firms -- who own 23 percent of Mitsubishi Motors -- were clear, but a sale was possible.
"We may reclassify our participation from at equity to available for sale," he said in a conference call held to explain the strategy U-turn agreed by management and supervisory boards late on Thursday.
Anticipation of a bailout had lifted Mitsubishi Motors' shares by 34 percent this month. The shares were suspended for much of the day, and met a wave of selling when the suspension was lifted, closing 25 percent down at 241 yen ($2.21).
DaimlerChrysler bought the Mitsubishi stake for 405 yen per share in 2000, with a view to expanding in Asia. The deal was engineered by Chief Executive Juergen Schrempp, who dreamt of building a global automaker.
Schrempp, who has presided over the loss of some 37 billion euros ($43.97 billion) in market capitalization since Daimler merged with Chrysler in 1998 and faced calls to resign at a shareholder meeting two weeks ago, was not available to comment.
ASIA STRATEGY UNDER REVIEW
His finance chief said he saw no reason for an immediate writedown of the Mitsubishi stake, whose market value is roughly equivalent to book value at the end of 2003, but could not specify the decision's impact on 2004 results.
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WOW. I can't stand Mitsu personally, but that's a shock. Never saw that one coming.
Maybe that's why they were running ads on TV about BRAND NEW MODEL Galants starting at $13,350 or something like that.
Maybe that's why they were running ads on TV about BRAND NEW MODEL Galants starting at $13,350 or something like that.
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I read the same news last night and was very surprised.
You have to wonder what the fortunes for Mistu would have been like if they'd brought the EVO over years earlier. Not that the sales volume of the EVO would have saved the company, but having a flagship car certainly wouldn't have hurt them.
It's going to be very interesting to see how the next 12-18 months play out for them.
For the sake of the guys who have already bought EVO's, I hope they find a way to make it work.
Anyone know if the Japanese government would consider bailing them out the same way we did for Chrysler years back?
When was the last time an auto maker went out of business?
You have to wonder what the fortunes for Mistu would have been like if they'd brought the EVO over years earlier. Not that the sales volume of the EVO would have saved the company, but having a flagship car certainly wouldn't have hurt them.
It's going to be very interesting to see how the next 12-18 months play out for them.
For the sake of the guys who have already bought EVO's, I hope they find a way to make it work.
Anyone know if the Japanese government would consider bailing them out the same way we did for Chrysler years back?
When was the last time an auto maker went out of business?
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From: Phoenix
We probably are, yes. I mean, Hyundai has been strapped by the billions in cash for years now, and they're still around.
One problem though: I bet ya Hyundai has more market share than Mitsubishi these days.
If I'm a business man wanting to take over a company and I had to choose between Hyundai and Mitsu (and assuming the ugly unknown details are equal and understood), I would very likely take Hyundai. Their cars may be bland, but at least they sell. Bringing Mitsu back to popularity would not only take money, but hiring the best marketing team ON EARTH.
One problem though: I bet ya Hyundai has more market share than Mitsubishi these days.
If I'm a business man wanting to take over a company and I had to choose between Hyundai and Mitsu (and assuming the ugly unknown details are equal and understood), I would very likely take Hyundai. Their cars may be bland, but at least they sell. Bringing Mitsu back to popularity would not only take money, but hiring the best marketing team ON EARTH.