DaimlerChrysler's Shareholders Annual Meeting by aihaozhe2


									Pressure is mounting inside DaimlerChrysler---maker of Mercedes vehicles and
quality as Mercedes strut mount --- as it held its annual stockholders' meeting.
Shareholders are demanding for the immediate disposal of the Chrysler Group.

But despite the active calls by shareholder groups that want to see the
German-American automaker scrap its US counterpart and return to being solely
German again, those looking for answers are likely to leave disappointed.

As expected by most analysts, there was no announcement made at last Wednesday's
meeting participated by some 8,000 shareholders.

In a filing with the US Securities & Exchange Commission last week outlining the
meeting, there was no mention of the sale of Chrysler which can be remembered has
been on the table since Chief Executive Dieter Zetsche said last February 14 that all
options for the Chrysler Group are already on the table.

It should be noted that more than one million shareholders of DaimlerChrysler is
pushing to dissolve the union of the German-American automaker. Ekkehard Wenger
and Leonhard Knoll have put forth such motion calling for the company to revert back
to its original name, Daimler-Benz AG. They contend that in order to "maintain a
corporate name that evokes associations with the failure of the business combination
with Chrysler is detrimental to the image of the corporation and its products."

Holger Rothbauer, a member of KADC Critical Shareholders-DaimlerChrysler, one of
those who opposed the 1998 acquisition of Chrysler said that he suspects that Zetsche
made his February announcement just to calm down the shareholders as preparation
for the annual meeting.

Rothbauer although he opposed the merger is also against the selling of Chrysler for
now since he claimed that the American arm of Daimler is undervalued. Instead he
wants to see the unit fixed and then disposed of for a much bigger gain.

But of course, it is clear to all shareholders that if ever Chrysler is sold, Daimler
would never gain back what it has paid for it. Analysts value the Chrysler AG from
nothing to US$13.7 billion or euro10.29 billion. The estimates will also vary with the
value placed on the assets such as brand names, factories and materials, all weighed
against Chrysler's estimated US$19 billion (euro14.3 billion) liability to pay
healthcare benefits for unionized retirees.

And basing from the evaluation of the Chrysler AG it is rather obvious that the
liability exceeds the value of the assets which is exactly the point that Rothbauer is
stressing. The purchase of the Chrysler Group would seem as if Daimler has paid
someone just to take its money-losing unit which should not be the case in the first

Rothbauer has also stressed the fact that the union with Chrysler has tainted the image
quality of Mercedes-Benz. With the disposal of the Chrysler Group, Rothbauer would
also demand for the ousting of Zetsche whom he blames for getting Daimler-Benz
into the deal in the first place.

There are no sure buyers for the Chrysler Group yet but the Canadian auto-parts
supplier Magna International Inc. has been reported to have submitted a bid to buy for
Chrysler at a price range between US$4.6 billion to US$4.7 billion (euro3.45 to
euro3.53 billion). Similarly, major equity firms Blackstone Group and Cerberus
Capital Management LLP are also rumored to be in pursuit of Chrysler.

Another name arise as a possible buyer and that is General Motors Corp. which was
reported to express interest shortly after Zetsche announced that it will exchange
Chrysler for a stake in GM. According to Alex Neuberger, an analyst who keeps track
of DaimlerChrysler for the CA Cheuvreaux brokerage in Frankfurt, Zetsche is under
intense pressure from the German shareholders to once and for all dispose Chrysler.

He also said that Zetsche was probably dismayed when Chrysler CEO Tom LaSorda
has announced another round of restructuring plan promising a 2.5 percent return on
sales by 2009. It should be noted that the rate of return promised was rather low
considering that it would be after the restructuring program plus the fact that
numerous new products would hit the market.

To top