Onex, Magna eye bid for Chrysler Schwartz, Stronach preparing all-Canadian offer for car maker
BOYD ERMAN AND GREG KEENAN
From Wednesday's Globe and Mail
Two of Canada's most aggressive and successful businessmen, Gerald Schwartz of Onex Corp. and Frank Stronach of Magna International Inc., are working on a joint bid for all of money-losing auto maker Chrysler, according to people familiar with the sale process.
The rationale behind a Magna-Onex partnership is that Magna could bring its expertise to operating auto factories, while Onex could use its financial finesse to run Chrysler's credit arm, the sources said.
Onex could also bring a labour-friendly private equity face to the table ? many unionized workers made big gains in the company's recent purchase of an aerospace company ? in a negotiation where making a deal with unions to cut costs will be key.
The price that Magna and Onex would pay is unclear, according to the sources, who requested that their names not be used, though there have been suggestions that seller DaimlerChrysler AG wants to generate at least $8-billion (U.S.) from a sale. Any buyer would also have to find a way to deal with the massive pension and health liabilities that Chrysler will come with, estimated at more than $15-billion.
Chrysler posted an operating loss of $1.5-billion last year after being sideswiped by a sudden and rapid rise in the price of gasoline, which sent sales of the company's pickup trucks and sport utility vehicles skidding.
The only offer that has been made public so far is a $4.5-billion cash offer from billionaire Kirk Kerkorian.
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