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Der Sturm (The Perfect Storm)
By MARTHA HINDES AND MYRON STOKES

Page 4 of 5 | previous

A Painful Future

"There is more pain to come at DaimlerChrysler unless unexpectedly there is an upturn in the economy which I don't see happening," said Ronis.

She said part of the DaimlerChrysler problem is that U.S. troubles threaten to impact the Daimler side of the business with its successful Mercedes line of vehicles.

"Based on the announcement of layoffs and comments that they were not deep enough, (the company) may use the opportunity to talk about further cuts, or maybe even an annulment," she said.

In addition, there have been rumors of a possible hostile takeover of DaimlerChrysler as a whole, prompting the company to bring aboard a major shareholder Deutsche Bank in Germany and J.P. Morgan Chase in the U.S. to help it build a defense against such a possibility.

The impact of Chrysler's problems isn't limited to corporate independence. What happens to the company could destabilize the American economy, in turn weakening the U.S. dollar, which at present still is the dominant global currency along with the Japanese Yen. But in Europe, the EU's common currency, the Euro, is available to take over that responsibility, with Germany poised to become a dominant economic world power

National Guard

The reality, according to some Washington insiders, is that the country no longer is dealing with corporate legalities or Wall Street predictions, but matters of national security.

The Defense Department recently expanded its definition of national security to include economic stability as the primary consideration, followed by military preparedness. It is becoming apparent, that in the aftermath of an extended and tumultuous presidential election process, the realization is now surfacing as to how serious the economic impact of a dissolved Chrysler Corporation would be unless aggressive countermeasures are quickly taken.

The near future doesn't look at all good for Chrysler, now in the throes of a failed marriage, where the snowball effect already has begun.

"They're going straight to hell," said an industry insider, who spoke on the condition of anonymity.

"I went way out on a limb before and said sooner or later that this was coming. But this is way sooner than anticipated. This wasn't a marriage. This was a purchase. A German company bought an American company. I said that from the beginning and I was absolutely right on target. Chrysler was making about $2,400 a vehicle. Now they can't give them away," he said.

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