On this day in motoring - Thursday 7th May 1998

http://www.365daysofmotoring.com/showonthisday/article/2268

On This Day
Thursday 7th May 1998
23 years ago

German automobile company Daimler-Benz, maker of the world-famous luxury car brand Mercedes-Benz, announced a $36 billion merger with the US-based Chrysler Corporation. The purchase of Chrysler, America's third-largest car company, by the Stuttgart-based Daimler-Benz marked the biggest acquisition by a foreign buyer of any U.S. company in history. Though marketed to investors as an equal pairing, it soon emerged that Daimler would be the dominant partner, with its stockholders owning the majority of the new company's shares. For Chrysler, headquartered in Auburn Hills, Michigan, the end of independence was a surprising twist in a striking comeback story. After a near-collapse and a government bailout in 1979 that saved it from bankruptcy, the company surged back in the 1980's under the leadership of the former Ford executive Lee Iacocca, in a revival spurred in part by the tremendous success of its trendsetting minivan. While Daimler had been attracted by the profitability of Chrysler's minivans and Jeeps, over the next few years profits were up and down, and by the fall of 2003 the Chrysler Group had cut some 26,000 jobs and was still losing money. In May of 2007 DaimlerChrysler announced it was selling 80.1 percent of Chrysler to the private-equity firm Cerberus Capital Management for $7.4 billion. DaimlerChrysler, soon renamed Daimler AG, kept a 19.9 percent stake in the new company, known as Chrysler LLC. By late 2008, increasingly dismal sales led Chrysler to seek federal funds to the tune of $4 billion to stay afloat. Under pressure from the Obama administration, the company filed for bankruptcy protection in April 2009 and entered into a planned partnership with the Italian automaker Fiat. The takeover was later documented by Bill Vlasic and Bradley A. Stertz in their book “Taken for a Ride: How Daimler-Benz Drove Off with Chrysler.”

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