Kerkorian vs. DaimlerChrysler situation

[mchastek]

As I am sure you all know, Kirk Kerkorian is pursuing a retrial in his case against DaimlerChrysler. I'm very interested to hear what you all think about the situation. Below is an excerpt from an article by the Detroit News (http://www.detnews.com/2005/autosinsider/0504/29/B01-166053.htm):


Lawyers for billionaire Kirk Kerkorian and his company, Tracinda Corp., appealed a federal judge's ruling that he was not fooled into supporting the 1998 merger of Chrysler Corp. and Daimler Benz AG that created DaimlerChrysler AG.
Kerkorian, the former Chrysler Corp.'s biggest share holder, sued DaimlerChrysler and Chairman Juergen Schrempp, saying he was led to believe the combination of the German and American automakers would be a "merger of equals," but that it turned out to be a takeover.

Under a takeover, Chrysler shareholders would have been entitled to a higher premium for their shares, Kerkorian contends.

Kerkorian's appeal, filed with the U.S. 3rd Circuit Court of Appeals in Philadelphia, disputes U.S. District Judge Joseph Farnan's determination that governance of the new company could change after the merger was completed.

"If that's going to be the law...the investment community should know and the employees in Detroit should now and the whole world should know that representations made publicly and in a proxy or in meetings only have to last a moment in time," Tracinda attorney Terry Christensen said in an interview.

Kerkorian filed his suit in 2000 after Schrempp was quoted in the Financial Times and Barron's as saying he intended all along for the deal to be a takeover.

In a 123-page ruling issued April 7, Judge Farnan rejected Kerkorian's claims that he was duped, saying he was a "sophisticated investor" and that "Kerkorian supported the merger before he had any discussions with anyone about corporate governance."

The ruling came 14 months after the case went to trial in Wilmington, Del.

While disputes over the facts of the case are not fodder for appeal, Christensen said he'll focus on Farnan's "application of law."

Michael Schell, an attorney for the New York firm representing DaimlerChrysler, doubted the chances of success for Tracinda's appeal.

"The U.S. District Court found no factual or legal basis for Tracinda's claims and an appeal will not change that," Schell said in a written statement. "Apart from devastating Tracinda's case, we think the opinion is virtually bullet-proof."

In its filing Thursday, Tracinda's attorneys further appealed Judge Farnan's November 2003 ruling that favored DaimlerChrysler in denying Tracinda a jury trial.

[Viper 10]

As much as I dislike bottom dwellers like Kerkorian, he has a valid point with regards to how this merger was sold to the investors as a merger of equals; that was purposely dilluted to ream the American shareholders and Chrysler's management team.


Read the book "Taken for a Ride" by Brad Stertz and you will understand Daimlers motives and how Eaton sold the company to the Devil. Notice how after the merger was complete that Eaton disappeared with his loot and never surfaced again. Iacocca admitted his mistakes in that he should have appointed Lutz to the CEO position instead of Eaton. At one time, Kerkorian had waged a takeover block of shares that included iacocca's shares. Eaton and Chrysler had war chested over $12 billion in cash to defend against Kerkorian's consortium.

Guess where that cash went when the takeover was complete? It all went back to Germany to pay off the mountains of debt that Daimler had accumulated. They were a financially insolvent company that needed cash badly and paid off Eaton to get to it.

For a long time, I wished that Kerkorian would have taken over Chrysler, because he couldn't have done worse to it than Daimler did. Daimler won everything and made Chrysler the scapegoat for the financial downfalls and dumping ground for old Daimler technology... like the E Class chassis being used on the Magnum, 300 and Chargers.

Remember that Daimler was writing off over $1 billion each year on product recalls alone... how is that for Daimler quality?

Brad

[Maxwedge]

From what I have recently heard, Bob Eaton(darth vader) said there never said that "co sharing" of the company was intended.
which seems to me to be a HUGE bit of bunk considering the amount of paper was filled with the "Merger of equals"...If Daimler were to be the Master from the beginning why did the word "Chrysler" get put next to "Daimler" in the new companies name. Why was the question "should we make the company a .Inc (a US company) or a .AG (German company) They Daimlers and Chryslers Lawyers researched which would be better for taxes and laws. If they were to be simply handed over to the germans, why would the .Inc or .AG even be an issue????

Eaton is as close to Evil and not actually have killed someone, as you can get.

[Viper 10]

Damion:


What do you think of kerkorian's play for GM? I think that he is speculating like crazy and buying everything he can on the company's downturn... thinking that the US government might bail them out eventually. I don't believe that K-man and Tricinda will actually try to own the monster.

I sort of scratch my head and wonder what Kerkorian's affection for Lutz is? The last two companies, Chrysler and now GM is where the maverick Lutz is moving and shaking... and then coincidentally pulled down by his bosses because he looks like a threat on the target screen. Does Kerkorian like Lutz or does he use Lutz as a lighting rod to figure out the company's vulnerability and lack of vision?

I appreciate your input on this.

Brad

[Maxwedge]

Brad
I do recall one of the press releases from kerkorian, about the lawsuit, claiming up front that his disapproval was initiated when Lutz and the then called "Dream Team" left. I do believe Kerkorian could be called a fan of Lutz's, thats for sure..


here is a transcript from a Sunday morning show back in 1991 about the Daimler Chrysler "merger of equals" that I have kept....


Road to riches or Dead End? It's a question that's bound to come up as the
auto industry gathers for the opening of the North American International Auto
Show in Detroit today. The merger of DaimlerChrysler, a venture launched with
much hope and fanfare, is sputtering badly. And there's fear that the maker of
the legendary Mercedes may have ended up creating an Edsel. The tale of the
merger's downhill run is our SUNDAY MORNING cover story.

(Footage of DaimlerChrysler merger ceremony)

MASON: (Voiceover) If you go back to the wedding day, the day in May of 1998
when Chrysler and Daimler-Benz said, `I do,' it was all champagne and promises.

Mr. JURGEN E. SCHREMPP (DaimlerChrysler): The companies are a perfect
fit--somebody said a marriage in heaven.

(Footage of business buildings; logos of Daimler and Chrysler; a Mercedes;
photographs of Gottlieb Daimler and Karl Benz)

MASON: (Voiceover) It was a royal wedding, the union of the three-pointed and
five-pointed stars: Daimler-Benz, the crown jewel of German industry, the
company named for the two men who invented the automobile.

(Photograph of early Plymouth ad; excerpt of Plymouth TV ad; footage of
automaking plant; Caravan LE minivan)

MASON: (Voiceover) And Chrysler, the scrappy American carmaker which rode the
Plymouth to prominence. After defying death in 1980 and again in 1990,
Chrysler had become the hottest and most profitable car company of the past
decade. Together, Daimler's charismatic chairman, Jurgen Schrempp, pledged,
they would change the industry.

Mr. JURGEN SCHREMPP (DaimlerChrysler): Today, we are creating the world's
leading automotive company for the 21st century: DaimlerChrysler
Aktiengesellschaft.

(Footage of DaimlerChrysler sign)

MASON: (Voiceover) But two and a half years later, the merger has become a
loveless marriage, and Chrysler's new president admits the company is in
crisis.

Mr. DIETER ZETSCHER (President, DaimlerChrysler): We are in quite some serious
trouble, there's no question.

(Footage of automaking plant; stock exchange)

MASON: (Voiceover) How serious? In the last half of last year, Chrysler lost
$1.5 billion. The stock has plummeted and shareholders are in open revolt.

Mr. SETH GLICKENHAUS (Glickenhaus & Company): We were deceived, totally
deceived. He misled us and everyone else. And he was extraordinarily
articulate in doing it.

Mr. SCHREMPP: We are combining the m--two most innovative car companies in the
world.

(Footage of press conference)

MASON: (Voiceover) So what has happened to the happy marriage?

To what degree did--did Chrysler people get along with Daimler people?

(Footage of Tom Stallkamp and Mason)

Mr. TOM STALLKAMP (Former President, DaimlerChrysler): On an individual basis
they got along great.

MASON: (Voiceover) As president in the new company, Chrysler's Tom Stallkamp
was put in charge of integration.

Mr. STALLKAMP: The--the issues that got in the way were cultural and historical
in the company.

(Vintage footage of early automobiles)

Mr. STALLKAMP: (Voiceover) They invented the car 110 years ago. Chrysler was
viewed as the 75-year-old little upstart that came along later.

Chrysler culture was based upon the last 20 years of just being a rebel and
being slightly bizarre.

(Footage of recent Chrysler models)

Mr. STALLKAMP: (Voiceover) And we prided ourselves on being a little bit off
the wall in our designs, in our organization and the way we ran the place.

(Footage of Stallkamp and Mason; footage of car plants)

MASON: (Voiceover) Before the merger, as Chrysler's purchasing chief, Stallkamp
had been part of what came to be called `Detroit's dream team.' Later, Daimler
and Chrysler even fought over what to put on his business card.

The Germans had a problem with your title?

Mr. STALLKAMP: Right, I was president, and that's not a title that's used in
Germany at all.

(Footage of Stallkamp and Mason talking)

MASON: (Voiceover) Stallkamp says his vision for a truly unified
DaimlerChrysler company did not sit well in Stuttgart, either.

Mr. STALLKAMP: And I thought we should use this momentous occasion of the
biggest merger in history, up to that time, to form a new company. And it
didn't turn out that way.

MASON: So did you piss off the Germans?

Mr. STALLKAMP: I think I probably irritated them a little bit.

MASON: (Voiceover) He would last little more than a year as president.

Did you get a sense they were always uncomfortable with this title or did they
get used to it?

Mr. STALLKAMP: I don't think they ever got used to it. Or maybe it was me they
never got used to.

(Footage of Robert Eaton)

MASON: (Voiceover) At the end of 1999, Stallkamp was forced to resign by CEO
Bob Eaton.

Mr. BOB EATON (Former CEO, DaimlerChrysler): We are leading a new trend.

MASON: (Voiceover) Less than a year later, Stallkamp's successor was also
ousted, and then there were none.

(Aerial footage of Chrysler headquarters)

MASON: (Voiceover) At corporate headquarters in Auburn Hills, all of Chrysler's
dream team--a dozen executives--are now gone; resigned, retired or fired.

Mr. FRANCOIS CHASTAING (Former Chief Engineer, Chrysler): I don't believe it
was a good idea to get into that merger in the first place.

MASON: (Voiceover) Engineering chief Francois Castaing bailed out before the
merger.

Mr. CASTAING: It is not a secret that, because of the merger, many American
management make a lot of money by exercising their option and so on, and their
mind was not 10 years down the road for the future of the company.

(Footage of Schrempp and Eaton)

Mr. EATON: I think it will also be a merger of exploration.

MASON: (Voiceover) Bob Eaton, who with Schrempp was co-CEO of the new company,
retired less than two years into the merger and reportedly walked away with
upwards of $200 million in options and grants.

You believe this crisis was ultimately of Bob Eaton's making.

Mr. CASTAING: Well, I would not say that that specifi--that strongly, but when
Schrempp offered the merger to Chrysler, someone has to say, `Yes, I'm going to
marry you. I'm going to give you the company to move to Germany,' and this is
Bob.

(Footage of Dieter Zetsche and others)

MASON: (Voiceover) Whoever created the mess at Chrysler, it is now up to Dieter
Zetsche to clean it up. Zetsche was hurriedly dispatched from Stuttgart by
Jurgen Schrempp to do damage control. On a cold day in December, that looked
like a daunting job.

Mr. ZETSCHE: Unfortunately the weather out there is a little bit reflective of
the market condition we are seeing out there: frosty.

(Footage of Zetsche; Mercedes car; Freightliner trucks; Chrysler headquarters
interior; aerial footage of Chrysler headquarters)

MASON: (Voiceover) Zetsche may an outsider, but he's a highly respected one. An
engineer and self-described `car guy,' he's spent more than two decades with
Daimler. He ran Mercedes. He also ran the Freightliner truck division in
Portland, Oregon. Still, behind the glass star on the 24th floor of what was
America's third largest auto company, a German is now in charge.

You're referred to not as the new head of Chrysler, you're referred to as the
new German head of Chrysler. Does that bother you?

Mr. ZETSCHE: Again, that's a thing in the press. That's not anything here in
this company. The--the people here just don't care.

MASON: (Voiceover) Perhaps, but Zetsche acknowledges Chrysler is in crisis.

Were the problems deeper than you expected?

Mr. ZETSCHE: Clearly, yes.

(Footage of car sales lot; Chrysler hood ornament; various Chrysler models)

Unidentified Man: She wants a four-door, she wants a Chrysler.

MASON: (Voiceover) The slowdown in the economy hasn't helped. But Chrysler
also misread the market. As competition cut into its dominance of minivan and
sport utility sales, Chrysler was stuck with excess inventory and had to offer
huge incentives to unload unsold vehicles.

Mr. ZETSCHE: We'll fix Chrysler and we'll prove to the world that this company
is much stronger together than both parts could be either one apart.

(Footage of automaking plant; Schrempp and Eaton)

MASON: (Voiceover) But fixing Chrysler is only part of the problem. Over and
over again, Schrempp and Eaton advertised this union...

Mr. EATON: ...as a merger of equals.

(Footage of Financial Times newspaper; text of statement superimposed)

MASON: (Voiceover) But in an October interview with London's Financial Times,
Schrempp acknowledged it was all a ruse to disguise a Daimler takeover, saying:
`If I had gone out and said, "Look, eventually Chrysler will be a division of
the DaimlerChrysler Group," everybody would have said "No way we will do a deal
like that."'

(Footage of Seth Glickenhaus; Kirk Kerkorian; stock exchange)

[Maxwedge]

Mr. GLICKENHAUS: I frankly think that this man may technically have committed
criminal fraud.

MASON: (Voiceover) Seth Glickenhaus of Glickenhaus & Company in New York has
filed a shareholder lawsuit. Billionaire Kirk Kerkorian, the company's largest
individual shareholder, has also filed suit. As the stock has plunged from a
high of $108 after the merger to $44 today, they've lost billions. More
important, says Glickenhaus...

Mr. GLICKENHAUS: If they had revealed the truth and said, `We're t--we want to
take over Chrysler completely,' he would have had to have paid an extremely
substantial premium, perhaps as much 60 percent, 70 percent above the going
price. Those are the damages that we are seeking.

MASON: You were robbed.

Mr. GLICKENHAUS: We were robbed. Exactly.

(Footage of newspaper articles)

MASON: (Voiceover) With Chrysler reeling and Kerkorian leading a legal
challenge, Schrempp knows the clock is ticking.

How much time does an executive have in this day and age?

Mr. STALLKAMP: If he was in North America, he would have run out of it already.

(Footage of minivan; Lee Iacocca; Stallkamp and Mason; Zetsche)

MASON: (Voiceover) Chrysler has come back from the dead before, of course. Lee
Iacocca led the resurrection in the 1980s; the dream team saved it in the '90s.
Can Dieter Zetsche perform the same miracle?

Your job is to fix Chrysler, but do you feel that the success of this merger is
now on your back?

Mr. ZETSCHE: Well, this is a way to put that which would--might scare you.

MASON: Does it scare you?

Mr. ZETSCHE: That's not the feeling I'm having.

(Footage of DaimlerChrysler merger ceremony; Chrysler logo; Schrempp)

MASON: (Voiceover) But Jurgen Schrempp's marriage made in heaven has become
hell on wheels. Now it's up to his best man to save the union, to save
Chrysler, and perhaps to save Schrempp's own job.

[hcuff]

You guy's are just hitting the surface of the corporate devious plan for GREED.

[Viper 10]

I can guarantee you one thing, Rick waggoner is wearing his Depends over the fact that Kerkorian and his sharks are circling the main course...

Brad

[NiceDeals.co.uk]

I'm in agreement with hcuff