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 place. 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.
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