In an historic deal, Chrysler goes private

DETROIT -- Chrysler became an American company again yesterday as Cerberus Capital Management gained a controlling share from Chrysler's German owners and started on the long road to restoring the 82-year-old automaker's luster -- and profits.

DaimlerChrysler AG transferred an 80.1 percent stake in Chrysler to New York-based Cerberus, one of the world's largest private equity firms, in a $7.4 billion deal. The German automaker retained a 19.9 percent interest in the new company, Chrysler LLC.

"After months of uncertainty, then a period of transition, we are beginning a new chapter in Chrysler's proud history -- and we have the chance to write a terrific story," Chrysler chief executive Tom LaSorda e-mailed to employees.

With the closing, Chrysler becomes the first US automaker in private hands since before Ford Motor Co. went public in 1956. Chrysler, which plans a companywide celebration Monday where it will revive its five-sided star logo, will be free of the short-term quarterly earnings pressures that public companies face, since there will be no Chrysler shares.

The sale ends the nine-year marriage of Daimler and Chrysler, which merged in a $33 billion deal that was hailed as creating a global giant.