DaimlerChrysler's President and Chief Executive Officer Tom LaSorda, left, the CEO of US private equity firm Cerberus John W. Snow of the US and DaimlerChrysler chief executive Dieter Zetsche.
#3. DaimlerChrysler Pays to Unload Chrysler
The German company DaimlerChrysler offloaded 80.1% of Chrysler, its money-leaching American car brand, to private equity firm Cerberus Capital Management for $7.4 billion. DaimlerChrysler — now renamed Daimler — jettisoned some $17 billion in healthcare and pension liabilities in the deal, but had to loan Cerberus $400 million to close the sale. It gets worse: Daimler saw only $1.4 billion of Cerberus' payment — $5 billion went to Chrysler's auto business and another billion to its financial services arm. And worse yet: After all the puts and takes of the transaction, Daimler actually ended up paying out nearly $2 billion to dispose of Chrysler. It was an expensive undoing of an expensive merger. In 1998, the German automaker, then called Daimler-Benz, bought Chrysler for more than $36 billion, a move that was designed to add a little German engineering spiffiness to the American auto, but ended up being a slow-motion collision of corporate cultures, management and manufacturing styles. Auf Wiedersehen, Dr. Z.