Private equity groups bidding for Chrysler producer of quality Jeep windshield wiper arm are now checking in with retailers to inquire about the vehicle lineup of the future US auto market. They want to gain insight into the automaker and the marketplace.
Bidders have also contacted publicly traded dealership chains such as Lithia Motors Inc., Group 1 Automotive Inc., and AutoNation Inc., that is according to The Detroit News. Some privately owned dealers were also contacted by the bidders to gain further info on the company they are bidding for.
It should be noted the private equity team that are bidding to buy Chrysler include the team of Blackstone Group and Centerbridge Partners, Cerberus Capital Management and the Canadian supplier Magna International Inc. DaimlerChrysler executive Ridiger Grude is meeting with those parties in New York this week. Kirk Kerkorian’s Tracinda Investment Company has submitted a $4.5 billion bid for Chrysler but since it was the last one to bid it has not yet been given attention by executives from DaimlerChrysler.
Chief Operating Officer Mike Maroone said that the Fort Lauderdale, Fla.-based AutoNation, the nation’s largest dealer chain with 30 Chrysler locations had a “series of conversations with a couple of big private equity groups” that are interested in Chrysler. He also added, "They were interested in our point of view on a number of issues -- products, the dealer network, the health of the industry. We talked about broad issues, not behind-the-scenes stuff -- our view of the market." Maroone also said that the AutoNation believes that the industry needs to take a more customer focused approach to building and selling cars and adopt a more rational pricing approach.
The Blackstone/Centerbridge team has spoken with Houston-based Group 1 Automotive’s CEO Earl Hesterburg recently according to people familiar with the discussions. Group 1 spokesman Pete DeLongchamps said that he was unaware of any meetings.
Lithia CEO DeBoer said that he is not the least surprise to know that potential buyers were contacting dealers. He also added, "We have no idea as a dealer what a manufacturing company should do or who should own it or how they should go about it. But we do know what sells and what has a lot of potential." DeBoer said that despite the problem within DaimlerChrysler he still believes that Chrysler will be better off with Daimler. He said, "They have tremendous synergy in many of the products. I just don't believe it's the right thing for the German company or Chrysler."
DeBoer further stated that if in case Chrysler is sold he would like to see the former Chrysler chief operating officer Wolfgang Bernhard to take on a key role. He said, "He's got tremendous energy and has a great grasp of what it would take to make Chrysler even better." Looks like DeBoer will have his wish granted since right now the former Chrysler operating officer is part of the Cerberus team that is contending for Chrysler. Lithia has more than 35 Chrysler, Jeep, and Dodge retail outlets.
And lastly as long as DaimlerChrysler has not yet chosen the new owner of its Chrysler arm the future of the American-based automaker will remain uncertain leading to more customers doubting the brand.
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