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Friday, 13 April, 2007

Magna International, Inc. of Aurora, Ontario have entered “serious talks” with representatives in Stuttgart about taking over the Chrysler Brands division of Daimler-Benz, AG. Estimated price: US$4.5 billion.

The sale is rumored to include Dodge, Chrysler, Western Star (medium duty trucks), Sterling (heavy trucks, formerly Ford’s heavy truck division), Thomas Built (truck bodies, primarily busses) and Global Electric Motorcars (U.S.-only “neighborhood electric” vehicles).

Jeep and Freightliner shall be retained by the renamed Daimler-Benz, AG.

DB and Chrysler facilities have remained largely discreet throughout the Daimler-Chrysler era, so no surprises are anticipated with regard to the dispensation of plants or other facilities. The new Chrysler company is expected to be incorporated in Ontario. The formal name has not yet leaked.

It is not clear at this time how or if this will effect the importation and sale of Dodge-branded Mercedes Sprinter vans. Currently it is believed the reorganization will not effect Hyundai’s relationship with the Dodge brand in Mexico.

Magna is expected to acquire all intellectual property of Chrysler, including models and marques. Speculation is coming in about the potential of resurrecting Plymouth, or even Rambler, as the entry-level division or Imperial as a premium brand. Magna Steyr, the European branch of this company, has provided components to Daimler-Benz for decades. This is expected to continue.

Magna sent somebody to Nashville to talk about something to somebody last week. Speculation includes luring someone important away from Nissan USA, or even consulting with Al Gore for some reason.

The fifth-largest American automaker would have been the first to move to Canada, had Studebaker’s manufacturing division not fallen apart due to a finance scandal in 1966.

Noted horse breeder and founder of Magna Entertainment, a sports media company, Frank Stronach CM, CEO and founder of Magna International is anticipated to serve as CEO of the combined Magna-Chrysler company. He would be the first jew to run a major North American automobile manufacturer.


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