DaimlerChrysler pulling out of Mitsubishi!
 

This doesn't bode well :(

http://biz.yahoo.com/rf/040422/autos...s_trade_1.html

http://biz.yahoo.com/rc/040422/autos...subishi_4.html

Reuters
RPT-UPDATE - DaimlerChrysler to quit Mitsubishi Motors
Thursday April 22, 7:44 pm ET
By Alexander Huebner


(Adds analyst reaction, conference call Friday, background)
STUTTGART, Germany, April 23 (Reuters) - DaimlerChrysler AG (XETRA: DCXGn.DE - News) said on Thursday it was pulling out of Mitsubishi Motors, leaving its bid to become a global carmaker in disarray and throwing the future of the ailing Japanese firm into doubt.

The group said that it had decided not to participate in a rescue capital increase planned by Mitsubishi Motors Corp. (Tokyo:7211.T - News) because it could not agree an acceptable deal with other shareholders in the Mitsubishi Group.

It also said it would not provide any further financial support to Mitsubishi, Japan's only unprofitable carmaker.

"This clearly means separation," a DaimlerChrysler spokesman said, adding that the 37 percent stake would be booked as discontinued business until a buyer could be found.

The decision came at an extraordinary meeting of the DaimlerChrysler supervisory and management boards on Thursday and just two weeks after Chief Executive Juergen Schrempp defended his global strategy in front of angry shareholders.

Mitsubishi, Japan's fourth-largest carmaker, had planned to seek shareholder approval for a 700 billion yen ($6.39 billion) bailout on April 30. Officials could not be reached for comment.

Reeling from losses on offering cheap car loans in the U.S., the maker of the Pajero sport utility vehicle is expecting a net loss of 72 billion yen for the 12 months to March 31. It had a profit of 37.36 billion yen the previous year.

Mitsubishi Motors' net automotive debt stood at around 726 billion yen six months ago, while total interest-bearing debt was 1.141 trillion.

"This could be the end for Mitsubishi if nobody else injects fresh capital," said one industry source.

SCHREMPP TO EXPLAIN MOVE

DaimlerChrysler bought the stake in Mitsubishi over three years ago with a view to expanding in Asia and the decision to cut its losses will pile pressure on Schrempp, who faced calls to resign at the annual shareholder meeting on April 7.

David Healy, an auto industry analyst with Burnham Securities, said that in "pulling the plug" on Mitsubishi it looked as if group board members had "finally rebelled against Schrempp's pouring money down that financial black hole."

Schrempp, who has presided over the loss of some 37 billion euros in market capitalisation since Daimler merged with Chrysler in 1998, will provide further details of the strategic U-turn in a teleconference at around 0900 GMT on Friday.

Unwinding the Mitsubishi investment will also have significant repercussions for Chrysler, the group's other problem child. Chrysler and Mitsubishi have established close production ties in a bid to cut costs.

The major unanswered question, Burnham's Healy said, was whether DaimlerChrysler had made alternate plans for new cars that Chrysler and Mitsubish were due to develop jointly.

"It really depends on whether Mitsubishi Motors survives in its present form without the financial backing of its largest shareholder. The Chrysler Group and Mitsubishi have been co-developing new platforms and that's a very important part of the small and intermediate passenger car program for Chrysler."

Without future collaboration with Mitsubishi, Healy said DaimlerChrysler would have to shoulder the entire development costs for Chrysler's new car programme.

"Chrysler might have to spend more development money than they were planning and, since the development overhead on the new models will be a lot higher, the profit potential out of their new models would be less."

Chrysler spokesmen were not immediately available for commment.

(Additional reporting by David Crossland in Berlin, Tom Brown in Detroit, and Chang-Ran Kim in Tokyo) ($1=.8424 Euro) ($1=109.58 Yen)

Holy breaking news batman, it's only 2am in Germany! :D

So that is probably not a good thing... looks like Mitsu better come up with some private investors asap else it will be curtains for them. :(

sucks

Now how will this play with the plans to intro the MR and RS?... Too bad, things were getting on the upside for Mitsu too.
(hope this wasnt offtopic terribly) But they definitely need some black ink on the profit instead of red.

this is not good...we need investors!
hey....
could you imagine if all :mitsu: boards got together and bought that 37% stake on Mitsu? :D
better customer service
mods would be "legal"
heck! we'd offer mods too
full line of accessories
.............
would be nice to turn it around

Honestly I think Mitsu and DCX will continue to maintain some sort of working relationship. Mitsubishi is up for drastic reorganization but I feel they're still a brand with potential in this market driven largely by the Lancer line as well as the upcoming Eclipse which probably has enough shock value to sell. As to your assertion that under communal ownership mods would be legal, I think we as consumers would finally understand what a losing investment warrantying "race cars" really is.

so how much is 37% of their stake? ill pitch in a 5 :D

The Mitsubishi Group companies are however committed to going forward. I would expect the Japanese government to step up to the plate on this one also.

Mitsubishi Group is a big ass company
Help out the motors division and buy back the remaining shares :D

i guess that means no return to factory backed WRC this year...

Evo Owners.. Start singing...

Nah Nah Nah Nah, Hey Hey, Goodbye...

improved service might save the company.. get a cue from honda.. they got fantastic customer service a service reps.

Hopefully Mistubishi Group will buy back Mitsubishi Auto.

In case you guys didn't know Mitsubishi Group is a GIANT in Asia. They make a lot of electronics and cargo trucks. They've got more than enough resources to pull Mitsubishi Auto out of this.

If Mitsubishi Auto was to die, there's gonna be huge concesquences in Japanese and world economy. Hopefully the Japanese government and Mitsubishi Group would do something and save the Evo's and Mitsubishi Auto.

Konnen sie dich "Dil-Do"?

Too much speculation, not enough REAL analysis. If you own an Evo, be glad. If you are thinking of buying an Evo, get on with it...

Yeah, BIG Company