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DaimlerChrysler to Quit Mitsubishi Motors
STUTTGART/TOKYO (Reuters) - DaimlerChrysler AG said it would pull out of Mitsubishi Motors, leaving the German-U.S. company's bid to become a global car maker in disarray and putting the Japanese firm's future in doubt.
DaimlerChrysler said on Thursday it would not participate in a capital increase plan to rescue Mitsubishi Motors Corp (MMC) because it could not agree on an acceptable deal with other shareholders in the Mitsubishi group.
It also said it would not provide any more financial support to Mitsubishi, Japan's only unprofitable car maker.
"This clearly means separation," a DaimlerChrysler spokesman said, adding that the company will book its 37 percent stake as a discontinued business until it finds a buyer.
The decision came at an extraordinary meeting of DaimlerChrysler's supervisory and management boards on Thursday, just two weeks after Chief Executive Juergen Schrempp defended his global strategy in front of angry shareholders.
Schrempp, who has presided over the loss of some 37 billion euros ($44 billion) in market capitalization since Daimler merged with Chrysler in 1998, will provide details of the strategic U-turn in a teleconference at around 5 a.m. EDT on Friday.
DaimlerChrysler shares were up about 6.5 percent at 38.43 euros after opening 8.9 percent higher on the news.
The news took the three main Mitsubishi group firms -- Mitsubishi Corp, Mitsubishi Heavy Industries and Bank of Tokyo-Mitsubishi -- by surprise but they vowed to continue their support of Mitsubishi Motors, the main flagbearer of the group's 120-year-old three-diamond logo.
"They may be able to scrape together enough aid money to see Mitsubishi Motors through the next year or two, but the auto maker will need more capital from outside," said Tatsuo Yoshida, a Tokyo-based auto analyst at Deutsche Securities.
"It would be very difficult for Mitsubishi Motors to survive on its own."