AN AUTONEWS 04-16-07 A 32 AUTONEWS 4/12/2007 12:34 PM Page 1

32 • APRIL 16, 2007 Zetsche’s ‘sell’ remark turns stock into a ‘buy’

Bradford Wernle Shares closed on Wednesday, April 11, at [email protected] $83.18. Since CEO Dieter Zetsche opened the door to DaimlerChrysler’s surging share price is sim- selling the Chrysler group on Valentine’s Day, ple to explain, says David Healy, analyst for investors have fallen back in love with Daimler- Burnham Securities in New York. Chrysler stock. “The shareholder group is obviously very vo- Shares were selling below $65 before Zetsche cal about (former DaimlerChrysler CEO Juer- opened his heart on Feb. 14 in Auburn Hills. gen) Schrempp’s acquisition was a mistake that They rose more than $5 that day and have been ought to be undone,” Healy says. “Every step climbing ever since. toward that pushes the stock up higher.” The peak came Thursday, April 6, when About 80 percent of DaimlerChrysler share- shares on the New York Stock Exchange shot up holders are in Europe, Healy says. Many of about 5 percent, finishing the week at $84.80. them were not fond of Schrempp’s ambitious That surge followed billionaire investor Kirk global strategy. Kerkorian’s announcement of his $4.5 billion Christoph Stuermer, analyst for Global In- bid for Chrysler. UAW President Ron Gettelfin- sight in Frankfurt, says he believes Kerkorian’s ger stoked the momentum April 7 by saying the bid might have given the stock a short-term lift. UAW recognizes that Chrysler may be sold, de- “Kirk Kerkorian is a pop star,” Stuermer says. When DaimlerChrysler CEO Dieter Zetsche revealed that Chrysler was for sale, its stock soared. spite its early opposition. “Whenever he does something, his worshippers do the same, and the stock be in demand. vestment report. “The UAW leadership seems Healy says. “The DCX stock almost got to $100. Already 3 bidders There’s a lot of fantasy in there. There’s a lot of to accept that change is inevitable and confirm A few years later, when they had their first At least three bidders already were in the run- fantasy on the floor. It’s really fantasy that peo- the union has been offered equity.” bailout by the parent company and top man- ning to buy Chrysler: private equity titans ple trade on.” agement guys left, the company got into big Blackstone Group and Cerberus Capital Man- Citigroup expects DaimlerChrysler stock to U-shaped curve trouble for the first time.” agement along with Canadian supplier Magna climb to 72 euros ($96.71). Burnham Securities’ Healy says it is easy to He adds: “What you have is a shallow International Inc. “Tracinda’s approach and remarks by UAW gauge how the stock market has viewed the U-shaped chart that began turning up last fall The three were to have met with Daimler- chief Gettelfinger add up to the impression that 1998 merger: Just look at a graph tracking the when (DaimlerChrysler CFO) Bodo Uebber first Chrysler’s chief strategist Ruediger Grube in a sale of Chrysler really will happen,” Citigroup stock’s progress since then. admitted” the company needed to consider all New York last week. analyst John Lawson wrote in an April 10 in- “Hopes were very high at the beginning,” options in fixing Chrysler’s problems. c

SHAREHOLDER VALUE REPORT

GLOBAL AUTOMAKERS GLOBAL SUPPLIERS Asian automakers chill Total shareholder return for largest global Total shareholder return for largest global automakers; percentage change per period suppliers; percentage change per period Q1 One Three Q1 One Three 2007 year years 2007 year years shareholders in 1st qtr. 1 DaimlerChrysler 32.7 47.4 120.9 1 Goodyear 48.6 115.4 265.2 2 32.6 102.9 271.2 Lindsay Chappell form the competition in shareholder return. 3 Fiat 32.0 100.1 264.9 2 American Axle 44.9 64.9 –25.8 [email protected] Both have seen rising vehicle sales for the past 4 Porshe 21.2 61.0 159.0 3 Valeo 40.9 45.5 56.2 For investors, the Asian auto industry was year, and Porsche’s moves on Volkswagen 5 10.5 –15.5 8.0 4 Collins & Aikman* 38.9 –16.7 –99.1 asleep at the wheel in the first quarter. stock also have stimulated shareholder return 6 6.4 14.9 50.1 5 GKN 37.7 34.9 93.3 European and U.S. companies crowded there. 7 Ford Motor 5.1 1.3 –36.1 Japanese and Korean competitors out of the top TSR Index 3.4 23.9 69.9 6 TRW 30.9 45.3 55.5 ranks of first-quarter performance, according Suppliers 8 BMW 2.7 8.8 52.3 7 Cooper Tire 28.6 31.9 –1.7 to the Automotive News/Pricewaterhouse- Market speculation and uncertainty roiled re- 9 General Motors 0.4 48.6 –25.1 8 BorgWarner 28.1 26.6 83.2 Coopers Total Shareholder Value Index. turns of supplier stocks during the quarter. 10 Hyundai Motor –1.7 –15.2 61.4 9 Kolbenschmidt 26.1 7.8 98.8 Every Japanese and Korean automaker except Goodyear’s shareholder payback was aided by a 11 Renault –2.6 12.9 82.0 Suzuki Motor Corp. lost money for its investors deal to sell its Goodyear Engineered Products 12 Motor –2.8 20.8 87.4 10 Lear 23.6 105.9 –38.2 during the first three months of this year. division. 13 Motor –9.8 –6.2 8.1 11 Michelin 15.4 80.3 162.0 Among suppliers, only one Japanese compa- American Axle shareholders benefited from 14 Motor –11.0 15.7 63.1 12 Continental 11.2 18.6 241.1 ny — Seiki — performed better than the speculation about its chances of winning wage 13 Johnson Controls 10.5 26.5 67.8 industry average for the quarter. And most of concessions from the UAW. 14 Plastic Omnium 9.5 18.0 128.0 them lost shareholder value. Shareholder value in Collins & Aikman Corp. “The market perceives that the Asians are gained even after federal indictments for fraud U.S. RETAIL GROUPS 15 7.9 6.8 2.1 heading into a slowdown,” says Darrell were handed down against the company’s Total shareholder return for U.S. retail groups; 16 Aisin Seiki 5.0 –8.7 87.5 Kennedy, senior associate in Pricewaterhouse- management team. That event apparently mat- percentage change per period TSR Index 3.8 12.8 54.1 Coopers’ Detroit office. “The volumes are still tered less to shareholders than C&A’s sale of Q1 One Three 17 Tenneco 3.0 17.4 100.6 there — you can see that in all the headlines. nine injection-molding plants during the quar- 2007 year years 18 Toyoda Gosei 2.6 9.3 –7.3 But the pace is slowing down from where it has ter. 1 Asbury Automotive 20.9 47.1 67.6 19 Clarion 2.3 –16.4 –23.9 been for the past couple of years. The growth 2 AutoNation –0.4 –1.4 24.6 may be slowing.” Retail 3 Sonic Automotive –1.4 4.6 20.9 20 2.0 –3.2 12.3 All the publicly traded U.S. retail groups lost 4 Lithia Motors –4.2 –19.9 3.4 21 Visteon 0.7 85.7 –9.0 Automakers shareholder value during the quarter, except 22 ArvinMeritor 0.6 25.3 –1.2 DaimlerChrysler AG’s plan to spin off the Asbury Automotive. TSR Index –6.0 12.3 40.6 23 Sanden –1.4 2.6 –26.4 Chrysler group helped ignite three-month re- Group 1 Automotive sunk to the bottom of the 5 CarMax –8.5 51.1 69.1 turns for investors. While DaimlerChrysler had charts for the quarter, due in part to a reported 6 UnitedAuto Group –13.6 –4.4 54.6 24 NSK –2.4 12.3 111.3 been strictly middle-of-the-pack for the past 9 percent decline in its fourth-quarter earnings. 7 Group 1 Automotive –22.9 –15.4 11.5 25 NHK Spring –4.0 –19.8 71.0 year, first-quarter 2007 gains moved it to the Asbury sat at the top of the segment, despite 26 Autoliv –4.7 3.5 49.5 top of the ranking. posting a 41 percent decline in fourth-quarter 27 Rieter –4.8 27.2 113.5 Volkswagen and Fiat continued to outper- earnings. c 28 Tower Automotive* –5.4 –17.6 –98.6 THE BIG PICTURE 29 –5.8 –4.5 72.6 About shareholder return Total shareholder return for automotive sectors; 30 Tokai Rika –6.3 –15.4 116.7 percentage change per period The data on this page represent the first- Shareholder Return Index is measured using 31 Magna –6.5 1.4 0.9 Q1 One Three quarter update of the Automotive share price movement, stock splits or 32 Showa –9.3 –13.8 48.1 News/PricewaterhouseCoopers Total buybacks and reinvestment of any cash 2007 year years 33 Akebono Brake –9.8 –18.8 95.4 Shareholder Return Index. The Index is dividends. The calculation assumes all Global automakers 3.4 23.9 69.9 calculated separately for automakers, dividends are reinvested in additional stock. U.S. retail groups –6.0 12.3 40.6 34 –10.0 –1.8 35.4 suppliers and retailers. Total shareholder The index average is weighted by market Global suppliers 3.8 12.8 54.1 35 JTEKT –17.0 –11.1 74.2 return, considered the best indicator of capitalization — a company’s share price 36 –17.1 –36.6 –39.0 shareholder value, shows the change in the multiplied by shares outstanding — so the 37 Delphi* –24.1 356.6 –69.9 value of an investment in a period. Each performance of companies with larger company on the Automotive market caps has a greater impact on the autonews.com 38 Dura* –30.6 –85.8 –97.4 News/PricewaterhouseCoopers Total index. See our Web site for past 39 Dana* –37.0 –42.0 –95.4 total shareholder return stories. *Currently operating under bankruptcy protection