Saw this in the Chicago Tribune Biz section this a.m.
Chrysler may sell off Viper
Amid slow sales, company to unload 'non-earning' assets
From Chicago Tribune news services
August 28, 2008
Chrysler LLC, selling assets to raise cash as U.S. sales slide, said Wednesday that it is considering the sale of its Dodge Viper sports-car business.
"We have been approached by third parties who are interested in exploring future possibilities" for the 600-horsepower, 10-cylinder car, Chief Executive Bob Nardelli said in a statement.
The Auburn Hills, Mich.-based company hired Lazard Ltd. as financial adviser to review options for the business.
Chrysler spokesman Todd Goyer declined to name the parties. He said the review is part of a move toward focusing on Dodge's core nameplates.
"Obviously, we want to ensure a strong future for the Viper," Goyer said. "But as we focus on the core business, we'll listen to people who have expressed interest."
He said the strategic review was for Viper alone, and added the company was simply reviewing options and there may be no transaction.
"My bet will be they will definitely be able to unload it," for a price of "maybe $100 million," said James Gillette, an automotive consultant at CSM Worldwide Inc. in Grand Rapids, Mich., who does asset valuations for customers.
Selling the Viper might help the third-largest U.S. automaker raise cash to help ride out a 23 percent decline in U.S. sales this year through July.
The closely held company sold $647 million in assets this year through May 28, according to a June presentation by owner Cerberus Capital Management LP.
Earlier this month, Chrysler Vice Chairman Tom LaSorda said the company has identified more than $1 billion in "non-earning" assets that it intends to sell to generate cash.
The Viper announcement comes as it rebuilds sales of the low-volume sports car. It is the company's most expensive vehicle, with prices starting at $88,125, and is hand-built at a Detroit plant slated to close by mid-2011.
U.S. sales of the Viper more than doubled, to 682, this year through July.
Although that already exceeded the 435 sold in all of 2007, it compares with more than 62,000 Chargers and 150,000 Rams sold this year. Annual Viper sales had reached 2,103 in 2003.
The nameplate may be past its prime given the small scale and niche focus, said Mike Jackson, director of North American vehicle forecasts for CSM Worldwide.
"Chrysler has some greater priorities to tend to," Jackson said. "The market has changed significantly. Competition within that premium luxury category only intensifies, and as a result, it really puts something like the Viper at a competitive disadvantage."
Chrysler may sell off Viper
Amid slow sales, company to unload 'non-earning' assets
From Chicago Tribune news services
August 28, 2008
Chrysler LLC, selling assets to raise cash as U.S. sales slide, said Wednesday that it is considering the sale of its Dodge Viper sports-car business.
"We have been approached by third parties who are interested in exploring future possibilities" for the 600-horsepower, 10-cylinder car, Chief Executive Bob Nardelli said in a statement.
The Auburn Hills, Mich.-based company hired Lazard Ltd. as financial adviser to review options for the business.
Chrysler spokesman Todd Goyer declined to name the parties. He said the review is part of a move toward focusing on Dodge's core nameplates.
"Obviously, we want to ensure a strong future for the Viper," Goyer said. "But as we focus on the core business, we'll listen to people who have expressed interest."
He said the strategic review was for Viper alone, and added the company was simply reviewing options and there may be no transaction.
"My bet will be they will definitely be able to unload it," for a price of "maybe $100 million," said James Gillette, an automotive consultant at CSM Worldwide Inc. in Grand Rapids, Mich., who does asset valuations for customers.
Selling the Viper might help the third-largest U.S. automaker raise cash to help ride out a 23 percent decline in U.S. sales this year through July.
The closely held company sold $647 million in assets this year through May 28, according to a June presentation by owner Cerberus Capital Management LP.
Earlier this month, Chrysler Vice Chairman Tom LaSorda said the company has identified more than $1 billion in "non-earning" assets that it intends to sell to generate cash.
The Viper announcement comes as it rebuilds sales of the low-volume sports car. It is the company's most expensive vehicle, with prices starting at $88,125, and is hand-built at a Detroit plant slated to close by mid-2011.
U.S. sales of the Viper more than doubled, to 682, this year through July.
Although that already exceeded the 435 sold in all of 2007, it compares with more than 62,000 Chargers and 150,000 Rams sold this year. Annual Viper sales had reached 2,103 in 2003.
The nameplate may be past its prime given the small scale and niche focus, said Mike Jackson, director of North American vehicle forecasts for CSM Worldwide.
"Chrysler has some greater priorities to tend to," Jackson said. "The market has changed significantly. Competition within that premium luxury category only intensifies, and as a result, it really puts something like the Viper at a competitive disadvantage."
