Daimler in talks to sell remaining Chrysler stake to Cerberus

DETROIT -- Germany's Daimler said Wednesday that it is in talks to sell its remaining stake in Chrysler to private-equity firm Cerberus Capital Management.

Daimler spokesman Han Tjan confirmed a report in Germany's Manager Magazin that the company is in talks to sell the 19.9% it owns in the U.S.-based automaker, but he would not say how long the discussions have taken place or give other details.

Cerberus also confirmed the discussions and said in a statement that if the transaction is successful "all existing industrial relationships between Daimler and Chrysler would continue." The statement gave no further details.

Cerberus bought 80.1% of Chrysler from Daimler in August 2007 in a $7.4 billion deal. The sale ended a stormy nine-year partnership between Daimler and Auburn Hills, Mich.-based Chrysler. The companies have continued to share diesel engine and other technology.

Since Cerberus took control of the automaker, Chrysler has faced tough times. The U.S. economy and auto sales have slumped, and $4-per-gallon ($1.05 a liter) gasoline has sent consumers away from its trucks and sport-utility vehicles toward small cars, where Chrysler's lineup is thin. Sales are off 24% through August.

As a private company, Chrysler does not have to report its earnings, but reporters and analysts were able to calculate Chrysler's performance from Daimler's financial statements. Buying 100% of the company would make Chrysler's earnings completely private.

On Tuesday top Chrysler executives told dealers that the company has lost $400 million this year. Chief Executive Bob Nardelli and Vice Chairman Jim Press used a satellite feed to address dealers who gathered in movie theaters across the country for a three-hour presentation on the state of Chrysler's business and future products.

Chrysler spokesman Stuart Schorr would not comment on what was discussed with dealers, but said the company has only talked about its performance for the first half of the year.

"There was no new financial information announced yesterday," he said.