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Chrysler Plants for Sale
DETROIT -- Chrysler LLC has quietly begun looking for buyers for two axle plants in Michigan, people familiar with the matter said, a move that reflects the auto maker's search for a leaner business model.
A year ago, Chrysler announced plans to build a new axle plant in Marysville to replace an aging facility in Detroit. But under Chief Executive Robert Nardelli, who arrived in August when Cerberus Capital Management LP acquired the auto maker, Chrysler has intensified efforts to reduce the capital it traditionally has invested in making major components.
Over the past two months Chrysler has approached two axle suppliers, Dana Holding Corp. and American Axle & Manufacturing Holdings Inc., as well as private-equity groups, offering to sell the two plants for about $400 million, people familiar with the matter said.
Chrysler is looking for a buyer to finish building the Marysville plant and, over time, close the plant known as Detroit Axle, these people said. Goldman Sachs Group Inc. is advising Chrysler on the proposal, they said.
A Chrysler spokeswoman had no comment. She said the firm has long planned to wind down operations at Detroit Axle when the Marysville plant is completed.
So far, the offer has sparked little interest, people familiar with the discussions said. Any deal would be complicated because closing Detroit Axle would require any buyer to work out a deal with the United Auto Workers union, they said.
Mr. Nardelli and Vice Chairman Jim Press, who also was brought in by Cerberus, are looking to back away from in-house production of components -- such as axles -- that consumers rarely consider when buying cars or trucks. Instead, they want Chrysler to focus its investments on interiors and fuel-saving technologies, which play a much larger role in winning over buyers and shaping consumer perceptions about the company and the quality of its vehicles.
http://online.wsj.com/article/SB120934005251748361.html?mod=yahoo_hs&ru=yahoo
DETROIT -- Chrysler LLC has quietly begun looking for buyers for two axle plants in Michigan, people familiar with the matter said, a move that reflects the auto maker's search for a leaner business model.
A year ago, Chrysler announced plans to build a new axle plant in Marysville to replace an aging facility in Detroit. But under Chief Executive Robert Nardelli, who arrived in August when Cerberus Capital Management LP acquired the auto maker, Chrysler has intensified efforts to reduce the capital it traditionally has invested in making major components.
Over the past two months Chrysler has approached two axle suppliers, Dana Holding Corp. and American Axle & Manufacturing Holdings Inc., as well as private-equity groups, offering to sell the two plants for about $400 million, people familiar with the matter said.
Chrysler is looking for a buyer to finish building the Marysville plant and, over time, close the plant known as Detroit Axle, these people said. Goldman Sachs Group Inc. is advising Chrysler on the proposal, they said.
A Chrysler spokeswoman had no comment. She said the firm has long planned to wind down operations at Detroit Axle when the Marysville plant is completed.
So far, the offer has sparked little interest, people familiar with the discussions said. Any deal would be complicated because closing Detroit Axle would require any buyer to work out a deal with the United Auto Workers union, they said.
Mr. Nardelli and Vice Chairman Jim Press, who also was brought in by Cerberus, are looking to back away from in-house production of components -- such as axles -- that consumers rarely consider when buying cars or trucks. Instead, they want Chrysler to focus its investments on interiors and fuel-saving technologies, which play a much larger role in winning over buyers and shaping consumer perceptions about the company and the quality of its vehicles.
http://online.wsj.com/article/SB120934005251748361.html?mod=yahoo_hs&ru=yahoo
