Monday, July 2, 2007

DaimlerChrysler Financial to Split Units

Associated Press 07.02.07, 10:19 AM ET

DaimlerChrysler Financial Services will uncouple its Mercedes-Benz and truck financial operations from Chrysler Financial when Daimler sells its Chrysler Group but employees will remain in Michigan.

DaimlerChrysler (nyse: DCX - news - people ) Financial on Monday announced that it would transfer 400 employees in the Mercedes and truck business units to an office building near DaimlerChrysler Financial's current Americas headquarters in the Detroit suburb of Farmington Hills.

The 400 workers would remain employees of the new Daimler AG once the sale of Chrysler Group to Cerberus Capital Management LP is completed in the third quarter, the company said.

The 800 people who now work for Chrysler Financial will stay at the current headquarters and work under Cerberus.

The split could create another 200 jobs across North and South America, with about 100 of them in Oakland County, Mich., DaimlerChrysler Financial said in a statement.

But company spokesman Jack Ferry would not comment on whether Chrysler Financial operations eventually would be consolidated into GMAC Financial Services. Last year, Cerberus and a consortium of investors bought a majority stake in GMAC from General Motors Corp. (nyse: GM - news - people ) for about $14 billion. Analysts have said buying a big stake in Chrysler would allow Cerberus to combine GMAC operations with Chrysler Financial.

In May, Germany-based DaimlerChrysler announced it would sell 80 percent of money-losing Chrysler to New York-based Cerberus, backing out of a troubled 1998 takeover aimed at creating a global automotive powerhouse.

DaimlerChrysler Financial Services employs 5,600 people nationwide.

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