DaimlerChrysler Sets Off ‘Frenzy of Speculation’

The Detroit News makes a prophecy, and enthused journalists do their part.

Chrysler became the latest American automaker to take a big hit yesterday, announcing a “restructuring plan” that will chop 13,000 jobs, shrink its roster of 32 models by 10 to 20 percent, and pare its number of dealerships by 10 to 15 percent — cuts the UAW’s president called “devastating news for thousands of workers, their families and their communities.”

That would have been plenty of news right there, but corporate German parent DaimlerChrysler AG also said that its Chrysler Group lost $1.48 billion in 2006 and that “all options are on the table” for the unit — an acknowledgment that, as the Detroit News prophesied Wednesday, “is sure to set off a frenzy of speculation about who would be interested in the Auburn Hills-based automaker.”

Enthused journalists are certainly doing their part thus far.

“The list of possible suitors that might be interested in shearing the Chrysler Group from DaimlerChrysler AG is quite long — but may well begin with ‘no one,’” the Detroit Free Press perplexingly began, before it laundry-listed the “world of suitors” in question. Meantime USA Today provided the magnificent lede that DaimlerChrysler’s might-sell announcement “pushed years of water-cooler speculation to the fore.”

And as a Detroit News columnist noted, “In a global automotive industry fueled by vast liquidity, hyper-competition and a tension between fast growth and high costs, the arrival of hired outside guns mean just about anything is possible for the future of Chrysler and its parent back in Stuttgart.”

We could go on with yet more examples of such informative dispatches, but instead we’ll close by turning to Forbes.com.

“Rumors of a Chrysler spinoff are flying faster than ever, just as the American arm of DaimlerChrysler announces a new downsizing,” wrote a soothsayer there. “Rumors have it that DaimlerChrysler [DCX] is talking to General Motors. Another rumor is that Carlos Ghosn of Nissan-Renault is buying DCX shares.”

“At this point, we cannot confirm the rumors,” the soothsayer added in the third paragraph — and so we jump to his conclusion, which summed things up pretty well.

“Chrysler, the American arm of DaimlerChrysler, seems to be in play. I do not see how any kind of deal could make sense, but in the auto business, anything can happen,” he wrote. “To quote William Shakespeare, ‘Lord, what fools these mortals be!’”

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Edward B. Colby was a writer at CJR Daily.