Rumors Spread; Morale Barely Breathing in Auburn Hills

By: Glady Reign

Rumors continue to build momentum in Auburn Hills and they create more nerve-racking aftermaths especially on the lives of the affected Chrysler's employees. Along with the not-so-good rumors is the plummeting morale of the workers. Certainly, who would not be rattled when you are facing one of the difficult days of your life?

The rumors were swiftly brought to a higher level when DaimlerChrysler AG reportedly began an auction launch of the company's American division. The transmission of rumors was as swift as that kind of function when produced by . On the other hand, the officials of the company said nothing has really changed since the turnaround plan announcement. Wednesday last week was a phenomenal day - it was when Dieter Zetsche, DaimlerChrysler's CEO, said the company is looking at all of its options. Nonetheless, he declined to give further comment on the situation. Since then, workers are contemplating on the future they would loathe to face.

In a private talk with Chrysler Group officials, they said that the fate of the company is now basically in the hands of the company's German high command in Auburn Hills. The options include a deal between DaimlerChrysler and General Motors Corp.

The possibility of a sale has spellbound different markets since the announcement. It has eventually placed the Chrysler on the auction block. Daimler is reported to be having talks with GM about a possible sale of Chrysler. Additionally, undisclosed private-equity funds also expressed their desire to acquire the company. However, critics in the industry are saying that an outright sale of Chrysler to GM is not a likely scenario.

Chrysler and GM have been in talks to produce a large sport utility vehicle together. But according to analysts, to create a full-fledged union of the companies would be burdened with loads of challenges. "It's an idea that comes from out of the blue, but it's not impossible," said David Cole who works as the director of the Center for Automotive Research in Ann Arbor. "The biggest issue is the pension and health care liabilities."

GM and Chrysler are still coping from moribund shares, overcapacity, and high production costs. As such, to merge them could create federal anti-trust issues. "The product redundancies are huge," said George Magliano of the research firm Global Insight. "They have very heavy dependence upon big trucks. They have similar deficiencies in the car lineup." Craig Huston, an analyst with the Gimmer Credit bond research firm added, "For GM -- which hasn't exactly shown great skill in managing its own business -- to go out and buy a struggling automaker doesn't get me all warm and fuzzy." The delightful GM turnaround is now moving positively but hurried decisions could curb its productivity. Analysts added that the purchase of an ailing rival could put to disadvantage GM's strategies to cope.

One of the reasons why morale in Auburn Hills are gradually deteriorating is the fact that Zetsche's support, which was once unwavering, is getting more hostile and colder. The Times of London earlier reported on its website that JPMorgan Chase & Co., in a memorandum the investment bank planned to circulate to potential suitors, was asking $13.7 billion for Chrysler or about a third of what Daimler-Benz paid for the unit in 1998. The figures exasperate German shareholders who own 80 percent of DaimlerChrysler's stocks. Those who are against the idea of acquiring the Chrysler Group said that purchasing is tantamount to poor investment.

On the hype of pouring speculations, Hyundai was pointed as an interested suitor. However, the Korean automaker said emphatically it was not interested in pursuing any kind a deal for Chrysler. Hyundai has been caught up in a leadership crisis in recent months, following the criminal conviction of its principal executive. "We are not considering to buy Chrysler because our hands are full," Hyundai spokesman Jake Jang said.

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