$500M Chrysler sale

Press, 12 August 1978, Page 8

$500M Chrysler sale

NZPA Detroit The Chrysler Corporation’s announcement that it was selling its European manufacturing plants was seen in Detroit yesterday as evidence that the world’s third largest car maker was dropping out of world competition to save itself at

[home, the “New York !Times” reports. The deal would net Chrysiler some SSOOM in stock and cash, and make the potential buyer, Peugeot-Citroen of France, the largest car maker in Europe. Chrysler would wipe off another S4OOM of debts, mainly incurred in the United Kingdom, by transferring them to Peugeot. But Reuter said the British Government is determined to block a take-over of Chrysler United Kingdom by the French car group unless rigorous assurances are given on the future of the company in Britain, trade department sources said yesterday. The agreement is subject to apmoval by each country’s Government The sources said the British Government could withdraw 60M sterling in loans and guarantees to Chrysler j as well as going to court, unless job security is assur- | ed for 23,000 Chrysler work-i ers in Britain. Chrysler United Kingdom had suffered endless strikes, in the last few years. The “New York Times” said the transaction clearly, signalled the end of Chrysler’s 25-year effort to match!

.its larger American competitors, the Ford Motor I Company and General (Motors, to become a major factor in world car markets. Chrysler will no longer be a significant factor in manufacturing abroad. Analysts noted that Chrysler will still maintain interest in two key foreign manufacturers, Peugeot and Mitsubishi. Under the terms of the Chrysler-Peugeot agreement, Chrysler will receive S23OM cash in October. It will also get a 15 per cent stake in Peugeot. In Paris, the French Industry Ministry welcomed the deal, which gives Peu-geot-Citroen about 18 per cent of the European market. Peugeot, originally a family firm, has been rising | rapidly to the top of the (European car manufacturers [since taking over the bankrupt Citroen group three years ago with French Gov(ernment help. The new group will have a workforce of about 260.000 people and will produce about 2.3 M vehicles a year. The West German Volkswagen firm, the previous European leader, makes (about 1.6 M vehicles a year