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Effect on Toledo Jeep uncertain if Magna wins Chrysler bidding

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At the Toledo Jeep complex, Magna International operates the shop that paints Wranglers.

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If Chrysler is purchased by a Canadian auto-parts manufacturer, the impact on the Toledo Jeep Assembly complex and other local DaimlerChrysler AG operations won't be felt immediately, an auto industry analyst said.

Magna International Inc. has emerged as a top contender in the possible separation of the struggling Chrysler Group from Daimler. Magna is vying with private equity firms and others to take over or to take a large stake in Chrysler, which makes Jeeps, Dodges, and other vehicles.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, said Toledo Jeep likely would have a significant role in a restructured company.

"There is a high level of uncertainty [as to the future of local Chrysler operations], but the Jeep plant will be part of it," he said.

George Magliano, an auto analyst at consulting company Global Insight, said Magna is the "suitor du jour" in the bids for Chrysler.

"They are obviously very serious," he said. "They seem to have the inside track."

The United Auto Workers, who have opposed the sale of Chrysler, are thought by some to favor Magna over the private equity groups that have expressed interested in the automaker.

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Magna operates the shop that paints Jeep Wranglers at Toledo Jeep, and it operates a Chrysler plant making Jeeps and other vehicles in Austria.

Its workers at Toledo Jeep are expected to be represented by the UAW. Magna has about 50,000 production workers the United States, Canada, and Mexico.

The local complex makes Jeep Libertys and Dodge Nitros as well as Wranglers. Chrysler also operates a machining plant in Perrysburg Township and has a joint-venture engine plant in Dundee, Mich.

Magna was founded in 1957 by Frank Stronach and is a major parts supplier to Daimler and other global automakers.

Daimler officials said this year that Chrysler was for sale, after the U.S. unit lost nearly $1.5 billion last year. But a suitor such as Magna might invest money but not have a majority interest in the firm.

Daimler is reported to be talking with some suitors. Onex Corp., a Canadian investment firm, is working with Magna on the deal, published reports have said.

Other bidders include the Blackstone Group and Cerberus Capital Management, private equity firms which the UAW fears may sharply cut costs and possibly break up Chrysler.

A small group of Toledo Jeep workers have proposed an employee stock buyout of Chrysler, and billionaire investor Kirk Kerkorian, who has made a bid for Chrysler himself, has approached the group to try to form an alliance.

The secrecy of the sale talks and Daimler's interests make it difficult to speculate on the outlook for Chrysler's current operations, analysts said.

By itself, Chrysler likely cannot survive and prosper globally and needs an alliance outside North America, Mr. Cole said.

"Until this actually comes down, there is not much that anybody will know about what could happen," he said.

Contact Mark Reiter at:

markreiter@theblade.com

or 419-724-6096.

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