DaimlerChrysler pulls plug on Mitsubishi

Gentz said he saw no reason for an immediate write-off ofthe stake but could not specify the decision’s impact on 2004 results. He said the US Chrysler unit would continue to cooperate with Mitsubishi on new vehicles and car production. ‘‘As far as our Asian strategy is concerned, we have to reconsider what has to be changed and what cannot be,’’ he added. DaimlerChrysler shares shot higher as investors expressed relief at what appeared to be the end of its costly entanglement with the struggling Japanese carmaker. They were trading up 7.8 pc at 38.66 and several brokers upgraded the shares to ‘‘buy’’. ‘‘It looks like some members of the management or supervisory board eventually decided to stop throwing good money after bad,’’ said Heino Ruland, auto analyst at Frankfurt brokerage firm Steubing AG.

The decision came at an extraordinary meeting of DaimlerChrysler’s management boards on Thursday. Schrempp, who has presided over the loss of some 37 bn euros ($ 44 bn) in market capitalisation since Daimler merged with Chrysler in 1998, engineered the purchase of the Mitsubishi Motors stake in 2000.

DaimlerChrysler sources downplayed suggestions of a boardroom rebellion against Schrempp, saying he was the one who initiated the decision to abandon Mitsubishi Motors after failing to get get enough bailout support from Mitsubishi Motors’ Japanese shareholders. The news took the three main Mitsubishi group firms —Mitsubishi Corp, Mitsubishi Heavy Industries and Bank of Tokyo-Mitsubishi — by surprise but they vowed to continue their support of Mitsubishi Motors, the main flagbearer of the group’s 120-year-old three-diamond logo. —(Reuters)