Reports: Chrysler decision near

NEW YORK (CNNMoney.com) -- Chrysler Group CEO Tom LaSorda told a group of the company's dealers that parent company DaimlerChrysler will make a decision about a possible sale of the money-losing relative soon, according to a published reports.

The Detroit News, which talked to several dealers who attended the Wednesday meeting, said LaSorda did not give a specific timeline but said the situation would be settled within six months.

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"It will be shorter than that," LaSorda said, according to one of about 25 dealers who was at the Naples, Fla. meeting.

Another dealer told the Detroit Free Press he expected a decision by the end of April.

The company has not commented on its plans and negotiations since it announced on Feb. 14 that it would look at all possible options for the Chrysler unit, which is widely seen as a decision to sell the division and undo the 1998 merger of the German and U.S. automakers.

Executives at Chrysler and DaimlerChrysler (Charts) have not commented on their negotiations about the possible sale of the unit. The company's annual shareholder meeting is April 4 in Germany. Shares of DaimlerChrysler were up 2.5 percent in Frankfurt trading early Thursday.

While DaimlerChrysler as a whole made money last year, the Chrysler Group slid into the red, posting an operating loss of $1.5 billion. The same day it announced it would consider a sale of Chrysler, it also announced plans to close plants and cut 13,000 jobs in an effort to stem those losses.

The company has not disclosed where all the job cuts would be, although it said it would close plants in Newark, Del., and a parts distribution center in Cleveland, as well as eliminating shifts at the Warren, Mich., truck plant later this year and a shift at the St. Louis South assembly plant in 2008.

Chrysler confirmed Wednesday that another 600 jobs would be cut at the two St. Louis plants, in addition to the 1,300 jobs being cut through the shift elimination, the Free Press reported Thursday.

The News also reports that LaSorda sent an e-mail to all Chrysler Group employees this week to try to buck-up morale, telling them it was important they do their best to help turn around losses at the No. 4 U.S. automaker.

"Whatever our future situation will be, we need to succeed as a team with our recovery and transformation plan," LaSorda wrote in the e-mail, according to the News report. "Our long-term viability depends on it. Everyone wants to be associated with a winner, and we need to prove again that we are winners. To a great extent, the future is in our own hands."

But the paper said that employees of the unit who talked on the condition that their names not be used were not as confident about the outlook. The paper reported that many said said anger, frustration and worry are the prevailing emotions in Auburn Hills as teams of potential private equity buyers tour the headquarters.

"The kiss of death is when you see investment companies looking at auto companies," one Chrysler designer told the paper.

The Free Press reports that Jerry York, an advisor to investor Kirk Kerkorian who helped turn around losses at Chrysler in the early 1990s, said in a speech Wednesday that any potential buyer of Chrysler had better have a good working relationship with the United Auto Workers union.

"If I were going to buy Chrysler, first of all I wouldn't even think about it unless I could form a true partner relationship with the UAW," York told the Michigan chapter of the Turnaround Management Association, according to the Free Press report. "That is absolutely essential." He also said the buyer would need to raise money not only for the purchase price but also to buy out more Chrysler employees as well as covering ongoing losses.

York served on the board of General Motors (Charts) for most of 2006 after Kerkorian made a major investment in that troubled automaker, successfully pushing GM to cut its dividend and executive pay. But he left the board after GM did not reach a deal to join an alliance with Nissan (Charts) and Renault, and soon thereafter Kerkorian sold his stake in GM.

The Wall Street Journal reported Thursday that in talks with potential buyers DaimlerChrysler has outlined detailed areas of cooperation that it would be willing to continue between its Mercedes division and any new owners of Chrysler.

The discussion of continued cooperation with Mercedes in purchasing, component sharing and engineering indicates the talks with the buyers are moving to a more advanced stage, according to the paper's report.

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