A Chrysler Spin-Off?

Stocks:  (DCX)(F)(GM)

DaimlerChrysler shareholders are so upset with Chrysler’s performance in the US, that many want the unit spun-off. It shows what fools they are in the first place. Of course, Chrysler was a standalone public company for decades before the Germans showed up.

One thing investors think they would get if Chrysler is thrown overboard is a better bond rating. Probably true. The company’s German management could stop flying to Detroit to work on cutting costs and trying to cut down the automakers huge and bloated inventory.

Who would want Chrysler’s labor problems? No one. And its shrinking share of the US market? Another popular selling point.

The fact is that Chrysler probably could not exist withour Daimler. The parent’s balance sheet is the key to keeping Chrysler from becoming another Ford Motor Company.  Of course Ford has had to pledge almost everything it owns to get $18 billion in debt to keep the company moving through its restructuring.

Investors have short memories. Daimler has not traded this high since 2000. At $58, it is barely below its 52-week high.

Chrysler does not have the resources to stand on its own, and Daimler is not going to hand it $25 billion in cash to see it through a restructuring.

Maybe Carlos Ghosn can buy it and merge the company with Nissan and Renault.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he write about.