DCX may be splitting after all

DaimlerChrysler is back in the spotlight today with increasing speculation that the Chrysler Group may be split from its German parent due to its poor financial performance. There were reports suggesting that there was no creditability to the previous rumors of a possible split, but the issue has flared up again after a German publication quoted an anonymous DCX board member who stated that a separate stock listing for the Chrysler Group was an option.

The quotes were published in Germany’s Der Spiegel, with comments like "we would be irresponsible if we did not draw up exit scenarios." German investors have been longing for a de-merger for years now, and the recent $1.5 billion third quarter loss only added to their arsenal. In a recent interview with analysts and reporters, Chief Financial Officer Bodo Uebber said the company was studying the situation and "we don't exclude anything." Further, Uebber declined to rule out the possibility of a sale DCX’s American arm.

A possible buyer could be Volkswagen, who currently does not have any US production facilities. Chrysler has also committed to producing a minivan for VW, so a partnership could be on the cards. The other option is DCX selling Chrysler to another American automaker to utilize its capacity, but this move is highly unlikely given the current financial situation of the domestic producers.