The Board of Management of DaimlerChrysler AG announced on May 14 details on the future concept for the Chrysler Group under Cerberus Capital Management and the realignment of DaimlerChrysler AG. In summary: • Affiliate of Cerberus to acquire 80.1 percent equity interest in new company Chrysler Holding LLC; DaimlerChrysler AG to retain 19.9 percent
• Obligations for pensions and healthcare costs to be retained by Chrysler companies
• Transaction expected to result in net cash outflow of EUR 0.5 billion for DaimlerChrysler
• DaimlerChrysler’s net profit according to IFRS in 2007 to be reduced in a range of EUR 3-4 billion
• Equity ratio of DaimlerChrysler’s industrial business is expected to be over 40% by the beginning of 2008
• Extraordinary Shareholders’ Meeting to decide on change of name to Daimler AG
DaimlerChrysler CEO Dieter Zetsche and John Snow of Cerberus Capital Management made a joint statement that iterated continued corporation between the two new companies as business partners. The joint programs include: conventional and alternative powertrain development, procurement activities and regional cooperation, cooperation in sales with financial services outside North America, shared logistics systems and more. “To coordinate our common projects,” Snow said in a statement, “we’ll establish a Joint Automotive Council, where representatives from Daimler and Chrysler will coordinate ongoing projects and evaluate the potential of new ones. This Council will be led by board-level members from each company.”