The Daimler-Benz purchase of Chrysler (first hinted at in yesterday’s Wall Street Journal) leads at USA Today, the New York Times, and the Los Angeles Times. The Washington Post goes with bipartisan congressional criticism of the Clinton administration’s attempt to impose terms on Israel in its negotiations with the Palestinians.
Daimler-Benz, the maker of Mercedes cars, will buy Chrysler for around $35 billion, making, says USAT and the NYT, the all-stock purchase the largest industrial merger in history. The NYT adds that it is also the largest-ever foreign acquisition of a U.S. company. Given current revenues, the deal will create the third largest car company, to be known as Daimler-Chrysler. The LAT gives a feel for the breadth of the new venture by noting that the top of the line Mercedes S600 sedan goes for $130,000 while the entry-level Dodge Neon goes for $12,000. (The NYT says the Neon starts at $11,000 and the top Mercedes is the CL600 coupe, which sells for $135,000.) The LAT says the deal’s motivations include Chrysler getting to expand its European sales, which lag far behind Ford and GM, and Mercedes getting the chance to offer down-market cars without tarnishing its snobby brand-name.
The papers see the deal as the beginning of a wave of consolidation in the auto business, brought on by excess manufacturing capacity. The WSJ gives the lay of that land: Companies ready to go shopping include, besides Daimler-Chrysler, Volkswagen, Toyota, and Honda. Likely acquisition targets include Mitsubishi, Subaru, Hyundai, Kia, Renault, Peugeot, and even perhaps BMW.
An expert in USAT’s story foresees layoffs, driven by the elimination of duplicate departments. But, say the LAT and NYT, the merger shouldn’t cause major layoffs because the two car lines are so different. The NYT sticks to this even as it blithely notes that in recent years Daimler has gotten rid of more than 40,000 employees.
There’s much talk in the merger stories of the challenges presented by the different corporate cultures of the two companies. A perhaps more interesting difference is not covered but could be teased out by an industrious reporter–a discussion of Daimler’s activities under the Nazis, including any involvement with slave labor.
The WP and NYT go top-front with Rep. Dan Burton’s apology to fellow Republicans for the uproar caused by his selective release of Web Hubbell tapes. In the Washington manner, Burton’s assumption of responsibility meant that someone else had to get fired–in this case it was Burton’s chief staff investigator. The Post reports that in a closed-door Republican House meeting, Newt Gingrich referred to Burton’s investigation of President Clinton as a “circus.” A lawmaker who was there tells the Post that Gingrich also told the group, “I want you to forget the word ‘scandals’ and start using the word ‘crimes.’”
USAT’s off-lead reports that at yesterday’s presidential press conference, the first questioner asked Bill Clinton to distinguish between his case and Richard Nixon’s use of executive privilege. Clinton said, “The facts are quite different in this case,” but didn’t respond to any follow-ups. The paper efficiently sums up his position with its headline: “Clinton: I am not Nixon.”