Chrysler may sell Viper division

[hemotox]

Well despite all the reassurances and positive comments on the future of the Viper, Nardelli is doing exactly as predicted.



Saw this in the Chicago Tribune Biz section this a.m.

Chrysler may sell off Viper
Amid slow sales, company to unload 'non-earning' assets
From Chicago Tribune news services
August 28, 2008

Chrysler LLC, selling assets to raise cash as U.S. sales slide, said Wednesday that it is considering the sale of its Dodge Viper sports-car business.

"We have been approached by third parties who are interested in exploring future possibilities" for the 600-horsepower, 10-cylinder car, Chief Executive Bob Nardelli said in a statement.

The Auburn Hills, Mich.-based company hired Lazard Ltd. as financial adviser to review options for the business.

Chrysler spokesman Todd Goyer declined to name the parties. He said the review is part of a move toward focusing on Dodge's core nameplates.

"Obviously, we want to ensure a strong future for the Viper," Goyer said. "But as we focus on the core business, we'll listen to people who have expressed interest."

He said the strategic review was for Viper alone, and added the company was simply reviewing options and there may be no transaction.

"My bet will be they will definitely be able to unload it," for a price of "maybe $100 million," said James Gillette, an automotive consultant at CSM Worldwide Inc. in Grand Rapids, Mich., who does asset valuations for customers.

Selling the Viper might help the third-largest U.S. automaker raise cash to help ride out a 23 percent decline in U.S. sales this year through July.

The closely held company sold $647 million in assets this year through May 28, according to a June presentation by owner Cerberus Capital Management LP.

Earlier this month, Chrysler Vice Chairman Tom LaSorda said the company has identified more than $1 billion in "non-earning" assets that it intends to sell to generate cash.

The Viper announcement comes as it rebuilds sales of the low-volume sports car. It is the company's most expensive vehicle, with prices starting at $88,125, and is hand-built at a Detroit plant slated to close by mid-2011.

U.S. sales of the Viper more than doubled, to 682, this year through July.

Although that already exceeded the 435 sold in all of 2007, it compares with more than 62,000 Chargers and 150,000 Rams sold this year. Annual Viper sales had reached 2,103 in 2003.

The nameplate may be past its prime given the small scale and niche focus, said Mike Jackson, director of North American vehicle forecasts for CSM Worldwide.

"Chrysler has some greater priorities to tend to," Jackson said. "The market has changed significantly. Competition within that premium luxury category only intensifies, and as a result, it really puts something like the Viper at a competitive disadvantage."

[PCH VIPER]

Having just returned from Detroit, I can say that everyone involved is very optimistic with the prospect of the Viper being sold off to a 3rd party.   Bottom line is that the Viper still has a future and the closing quote from the VOI-10 closing banquet was "See You All at VOI 11 ! "

P.S. We missed you in Detroit Hemotox.  I got to drive / abuse an '08 SSG on the Auto-X and road course.  I hit 125 in a blink of an eye in third gear !!!  Amazing speed and power.

Lance

[hemotox]

PCH VIPER,

Well, I have 600 miles on mine and haven't been above 63 MPH when I got my first ever speeding ticket on PCH!

Good news about the future?  Who or what organization will buy Viper?  What about obtaining original parts and service once Chrysler unloads the Viper production?  What happens to our extended warranties, who knows what kinds of Vipers will be produced in the future, what private investors have access to SRT technologies, how much will new vipers increase in cost?  Lots of questions appear once Chrysler abandons the Viper and its customers.  I don't believe VOI produces automobiles, at least they were not producing them the last time I went to an event. They do produce a party every two years and keep a registry.   However, I knew when Nardelli was going to get into full swing at Chrysler, he would nix the Viper, as did everyone else, but the nathsayers were doing "viperspin speak", promising us a long and happy relationship with Dodge.  Nardelli is a Home Dept kind of guy, not an Enzo Ferrari or Carroll Shelby type.  Chrysler should fire him and get someone from Boeing or Google to manage the company.  Even the editorials in the last Viper Magazine were touting how Chrysler was committed to the Viper for years to come.  Chrysler gets rid of the Viper, they will sink to new lows.  It will be over for them, they will be known for byuilding Jeep and the Mini Van.

It is all

Not to   but, when I hear stuff from Chrysler now it goes into the

and   depository!

How was VOI 10?  Lots of enthusiasts?  Images?

[ViperX]

EJ,

This is pure speculation on my part, but I think the sale of Viper to someone like Saleen, Roush or Penske could be very beneficial.  Conversely, selling Viper to the wrong company would mean the end.

As I recall, (correct me if I'm wrong) Saleen built the Ford GT, which is a pretty good example of what two companies can do if they work together.

Who actually sells / markets Vipers?  Dodge doesn't - VOI members and the club itself seem to be the marketing arm.

One thing is for certain, if Dodge / Cerberus screws this up, they will have likely sent all of us to another brand. 

They may or may not seem to realize how powerful a buying group we are.  Time will tell.

The future will be interesting, and like I've always said, buy 'em while you can get 'em.

Dan

[hemotox]

Dan,

Appreciate your thoughts.  To me, Dodge sells the Viper, and it is over for Dodge, they will become a Jeep, minivan compamy.  The Viper is DODGE, you don't sell your heart and soul and expect to be the same or better company.  It makes no difference to me, I have my Viper, but I will be quite upset if I cannot get parts, or the value drops because of a 3rd party mismanagement of the Viper name and car.  Saleen, Penske, etc. aren't doing that well financially and you can see what has happened to Saleen's mustang, they aren't selling.  Bad time of the decade to be selling sports cars.  An with all these green turnip heads and biofuels, train tranportation, we need to fight for every issue.  Especially with the knuckleheads in Sacramento who will try to tax or legislate sports cars out of California.

Read page 5 of the summer 2008 issue of Viper Magazine and see how things appear to be going in a 180 diametrically opposed position from that commentary.

What ever happens, it will effect us directly or indirectly.  Production stopping or selling off of the division,  means fewer new members, no new technology, end of an era, no legacy etc.  Sad state of affairs.    <F

Just venting@!

[Mr. Fangs]

Quick update.

DETROIT (Reuters) - Chrysler LLC CBS.UL will start negotiations on the possible sale of its Viper sports car line in the next few weeks, Vice Chairman Tom Lasorda said on Tuesday.

"We've had a lot of excitement," Lasorda told reporters at an event hosted by Chrysler. "We will start negotiations in probably another three or four weeks."

Chrysler said earlier this month it has drawn interest from international and North American parties for the possible sale of its high-performance Dodge Viper sports car line.

(Reporting by Kevin Krolicki, Editing by Maureen Bavdek) >j

[hemotox]

Amazing how spin doctors can turn something like selling a premier spots car from a manafacturer as " A lot of Excitement"  Chrysler is toast, viper legacy ends.  Hope you snatch up the remaining 08s, coubt 09 will be produced.

All those comments in the Viper Magazines about Chrysler's commitment to the viper for the future, were basically lies!

Good Riddens!

[Kala]

"We've had a lot of excitement," Lasorda told reporters at an event hosted by Chrysler. "We will start negotiations in probably another three or four weeks."

Anyone else think its odd that they have interested parties, and they are only going to START negotiating in 3 to 4 weeks???

I bet they got an offer... And are trying to bump it up... >o

[hemotox]

ViperX , hope you get your ACR, may want to consider finding an 08.  Car may be way more different than what you were anticipating for an 09.

[ViperX]

EJ,

They were making 2009 Vipers as we visited Connor Ave Assembly plant at VOI 10, so not too worried.

Not too sure about 2010 though as far as Dodge goes.

I do agree with you on one point, if Dodge sells Viper, Dodge will equal trucks and mini vans - neither are too exciting to me.  And the new Challenger is big and heavy, very heavy - not really a good drag car or road car, i.e. not an enthusiasts car.

If Dodge's plan is to replace Viper with the new Challenger, I'm disappointed.

But then Dodge has never used Viper to help market their cars like they should have ..... IMHO.

Dan

[Kala]

Dan have you driven the Challenger?

I was thinking about selling my H2 SUT and getting one for a DD...

[Kala]

Chrysler plugs in

Chrysler LLC, the smallest of Detroit's Big Three automakers, unexpectedly unveiled three functioning battery-powered vehicles, jumping headlong into the race to build a mass-produced electric car. "I didn't think they were a player," said Jim Hossack at consultancy AutoPacific. "I'm impressed. This suggests a lot of bravado." The three vehicles -- a minivan, a Jeep, and a sports car -- are slated to hit the market by late 2010. (Los Angeles Times) The cars were introduced as Congress is mulling over $25 billion in government-backed loans, possibly tied to increasing fuel efficiency. (BusinessWeek.com) The parent of Indian automaker Tata, meanwhile, said the credit crisis is making the U.S. and Europe ripe for acquisitions. (Bloomberg)
>1

[ViperX]

Hi Kala,

Yes, it drives like a two door Charger and would make a very nice daily driver.  It has a nice ride and good handling for a car of it 's size and weight.  Performance is OK too.

I like the car.  I think it would have been more sporty if it were lighter, shorter and not so tall.  IMHO,m the car's chassis should have been a total re-design and wasn't.

Dan

[Kala]

From Left Lane news

09/24/2008, 5:53 PM
Chrysler News
Cerberus set to take over Daimler's remaining stake in Chrysler

Cerberus Capital Management – the now parent company of Chrysler LLC – has approached Chrysler's previous owner, Daimler, about acquiring the rest of the German company's stake in the Michigan automaker. When Cerberus purchased Chrysler, it received an 80.1 percent stake in the company, with Daimler holding onto the remaining 19.9 percent.

The deal currently in discussions would see Daimler selling its 19.9 percent to Cerberus, giving Cerberus complete control of the company. However, even if the deal goes through, Chrysler and Daimler would still likely collaborate on some ventures, such as technology and platform sharing, according to Automotive News.

The reason for the talks remains largely unknown. Industry analysts have a few speculations, including there was an unpublicized provision in the original contract between Daimler and Cerberus allowing for the sale of the remaining stake or that Cerberus is preparing to sell Chrysler. However, Daimler previously reported its stake in Chrysler cost the company $515 million in the first quarter alone, so the German firm could be looking to simply cut its losses.

Whatever the reason, it appears as though both sides are in the support of the deal, so look for the rest of Chrysler to be handed over to Cerberus in the near future.

[Kala]

This article is in Business Week


Cerberus Seeks To Buy Remainder of Chrysler: A Sale in the Future?
Posted by: David Kiley on September 24

chrysler

Despite tight-as-a-tick credit markets, Cerberus Capital Management is in talks with Daimler Benz to acquire the 19.9% of Chrysler LLC it doesn't already own.

Cerberus bought its controlling stake in Chrysler in 2007. Since then, sales at the automaker have precipitously dropped, auto industry sales on the whole have slipped to levels not seen since the 1980s and the forecast for sales and the U.S. economy next year is at least as bleak as this year.

Maybe it is a time to buy.

This statement from Cerberus: "Cerberus confirms that it has approached Daimler about the possible redemption of its 19.9 percent stake in Chrysler. We are currently in discussions. In the event of a successful transaction, all existing industrial relationships between Daimler and Chrysler would continue."

There are two big reasons for Cerberus to buy the remainder of Chrysler: First, the price will probably never be lower from Daimler, which would like to have the automaker completely off its books. Second, a potential buyer for Chrysler (Renault-Nissan or even a Chinese auto maker), would rather not have Daimler muddying up any negotiations.

By buying the rest of Chrysler, there would be less pressure on Cerberus to offer any financial guidance to the marketplace about revenues or earnings. Because Daimler is publicly traded, the German automaker has to report the progress of its stake in Chrysler. Each quarter and at the end of the year, analysts and media are left to extrapolate those numbers for all of Chrysler.

Daimler-Benz acquired Chrysler in 1998, but endured nearly a decade of heavy losses and distraction before selling it off to Cerberus last year.

Chrysler is in two major deals with Nissan: one that has Chrysler supplying Nissan with a version of its Ram truck that Nissan dealers can sell in a few years; and one in which Nissan will supply to Chrysler a small car based on its Versa subcompact. Sources inside Chrysler, as well as outsiders who are close to management, have said in recent weeks that they would put the chances of an acqusition of Chrysler above 50%. Several point to Renault-Nissan as a logical acquirer, or the automaker most likely to take a large equity stake.