Chrysler Taking Sharp Look at Bid Offer : Autos: It’s hired three firms to study Kerkorian takeover plan. Iacocca criticizes his successor for moving too slowly.
Chrysler Corp. Friday said it hired three investment banking firms to evaluate the takeover bid made this week by financier Kirk Kerkorian, while former Chrysler Chairman Lee Iacocca sharply criticized his hand-picked successor at the nation’s third-largest auto maker.
Morgan Stanley & Co., Salomon Brothers and CS-First Boston will advise Chrysler on the $55-a-share offer from Kerkorian’s Tracinda Corp., Chrysler spokesman Steven Harris said. The proposed deal has a value of $22.8 billion.
Harris declined to say whether Chrysler’s board plans to meet over the holiday weekend. The auto maker continues to stand by its previous statement that it is not for sale but will consider the bid in due course, he said.
The company, however, did express shock at Iacocca’s criticism of current Chairman Robert Eaton for moving too slowly to improve the quality of the company’s cars and trucks. Iacocca has teamed up with Kerkorian and pledged $50 million toward the takeover bid.
“I hired him to do quality (improvements),” Iacocca told USA Today. “He’s addressing it, although he got on it more slowly then he could have.”
Iacocca, who hired Eaton away from General Motors Corp. three years ago, said Chrysler has suffered too many recalls and problems with its vehicles. “You’d better get on with it and get (the company’s) act together,” said Iacocca. “Ford is improving and so is GM.”
Iacocca insisted that he does not harbor any resentment against Chrysler and will not fire Eaton if the takeover succeeds.
Chrysler Vice President Arthur Liebler said the company’s performance under Eaton speaks for itself.
Chrysler had record profits last year, is the most efficient auto maker and has $7.3 billion in cash to protect operations during the next recession.
“We’re shocked and we’re disappointed that Mr. Iacocca has chosen to engage in such an attack,” Liebler said.
In his interview with USA Today, Iacocca also defended his partnership with Kerkorian and his bid for Chrysler. “I don’t want (Chrysler) wrecked,” he said. “I’m not a raider. I’m not looking for a killing.”
The former Chrysler chairman reiterated he has no interest in running the Detroit auto maker again or serving on its board. “The hell with that,” he said. “I don’t think so. Adviser, I like. Consultant, I like.”
Chrysler on Thursday reported a 37% decline in first-quarter earnings from a year ago to $592 million, largely because of the changeover to its new 1996 minivans, higher raw material costs and lower sales in Mexico. It was the first earnings drop for the auto maker after eight consecutive quarters of increases.
