Tom LaSorda, president and CEO of Chrysler present and future, spent his first day back on American soil filling in the blanks and debunking misinformation following the surprise announcement May 14 that the 83-year-old automaker had been sold and will soon be a standalone private company.
LaSorda was still bleary-eyed and jet-lagged from the flight back from Stuttgart, Germany, where the news came out that a deal had been reached to sell Chrysler. New York equity firm Cerberus Capital Management will own 80.1 percent of Chrysler while former parent DaimlerChrysler AG will retain 19.9 percent.
The new Chrysler will consist of the Chrysler Corporation—the name it had prior to its 1998 merger with Daimler-Benz—which will design, engineer, build, and sell Dodge, Jeep, and Chrysler brand vehicles. Chrysler Financial Services will be a separate entity. Both will report to Chrysler Holding, which is majority owned by Cerberus.
The 20-member supervisory board of DaimlerChrysler today approved the split. After the divorce is finalized, the German parent will be renamed Daimler AG. The deal is expected to close in the third quarter.
LaSorda, who retains his job running Chrysler, made it a priority to meet with union officials, media, and executives, including some from Cerberus. The CEO was kept updated in the six months he says the project was in the works, but was not directly involved in the talks and admits to being surprised himself at the speed and quality of the negotiations and final deal. He says Cerberus was chosen for its desire to grow the business and bring cash to the venture, as well as expertise in the financial and operational side of business.
The message in the succession of meetings was overwhelmingly rosy—even critics such as outspoken Canadian Auto Workers president Buzz Hargrove were on board after spending time with Cerberus CEO Stephen Feinberg and others. The union president was semi-gushing by day’s end, saying workers were better off with Cerberus than Daimler. Much of his enthusiasm was fueled by a signed letter guaranteeing no layoffs as a result of the sale, and the new owner’s pledge to address one of Hargrove’s biggest pet peeves: unfair trade between North America and Asia.
United Auto Workers president Ron Gettelfinger, who is on the DC supervisory board and was privy to internal information before the sale was announced, endorsed the move immediately as being in the best interests of workers.