UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 13)*
Chrysler Corporation
(Name of Issuer)
Common Stock, $1.00 par value
(Title of Class of Securities)
171196 10 8
(CUSIP Number)
Stephen Fraidin, P.C.
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
(212) 859-8140
(Name, Address, and Telephone Number of Person Authorized to
Receive Notices and Communications)
April 25, 1995
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this statement because of
Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement
[ ]. (A fee is not required only if the reporting person:
(1) has a previous statement on file reporting beneficial
ownership of more than five percent of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to
the liabilities of that section of the Act but shall be subject to
all other provisions of the Act (however, see the Notes).
<PAGE>
This Amendment No.13 amends and supplements the Statement on
Schedule 13D (the "Schedule 13D") filed on behalf of Kirk
Kerkorian, Tracinda Corporation ("Tracinda"), a Nevada corporation
wholly owned by Mr. Kerkorian, and Lee Iacocca (Mr. Kerkorian,
Tracinda, and Mr. Iacocca are collectively referred to hereinafter
as the "Filing Persons"), relating to the common stock, par value
$1.00 per share, of Chrysler Corporation, a Delaware corporation
(the "Company"). A copy of the Joint Filing Agreement among the
Filing Persons was previously filed as an Exhibit to the Schedule
13D. Capitalized terms used and not defined in this Amendment
have the meanings set forth in the Schedule 13D.
1. Item 4 of the Schedule 13D, "Purpose of Transaction,"
is hereby amended and supplemented to add the following:
* * *
Item 4. Purpose of Transaction.
Tracinda sent today to the Chief Executive Officer and
Chairman of the Board of Directors of the Company a letter, a copy
of which is included as an Exhibit to this Amendment, and which is
incorporated herein by reference.
Except as expressly amended and supplemented hereby,
the text of Item 4 of the Schedule 13D remains in effect without
modification.
2. Item 7 of the Schedule 13D is hereby amended and
supplemented to add the following:
* * *
Item 7. Material to be Filed as an Exhibit.
Letter dated April 25, 1995, to the Chief Executive
Officer of the Company.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
TRACINDA CORPORATION
By: /s/ Anthony L. Mandekic
Anthony L. Mandekic
Secretary/Treasurer
Dated: April 26, 1995
<PAGE>
April 25, 1995
Mr. Robert J. Eaton
Chairman and Chief Executive Officer
Chrysler Corporation
12000 Highland Drive
Highland Park, MI 48288-1919
Dear Bob:
Tracinda Corporation has been a loyal and supportive
shareholder of Chrysler since 1990, and has always given its
financial support to the company when asked to do so.
Specifically, in connection with the March, 1991 offering of 60
million shares, your predecessor made a personal appeal to us to
purchase 6 million shares and to issue a press release to show our
support for the offering. We were told that Tracinda's
participation was vital to the successful completion of the
offering. Subsequently, you personally visited me to secure my
commitment to purchase 4 million shares in the 1993 public
offering. In addition, every time that Tracinda has requested
something from the company, it has never been for Tracinda alone -
it has always been for all the shareholders.
In light of the events that have transpired during the past
two weeks, it is clear to us that the shareholders, who are the
true owners of the company, are not being given the consideration
they deserve and are not being given an accurate picture of the
facts.
The facts are indisputable: Your management team was first
provided with a detailed written presentation regarding the
economics of an acquisition transaction in December, 1994. On
March 14, 1995, a member of Chrysler's management informed us that
a buyout scenario was included on a list of strategic alternatives
approved for further study by you.
On March 30, 1995, members of your top management team were
again given a detailed written presentation of the transaction
and, based on their review, described the transaction as "doable"
and intriguing". On April 6, 1995, you personally discussed the
proposed transaction with the independent directors of the Board's
executive committee, who suggested that you not discuss the matter
with the entire Board ostensibly to prevent leaks.
<PAGE>
Mr. Robert J. Eaton
April 25, 1995
Page 2
On Monday, April 10, 1995, two members of Chrysler's top
management met with representatives of Tracinda. By that time,
Chrysler's management was sufficiently knowledgeable about the
economic aspects of the transaction that the discussions had
progressed beyond the numbers to addressing the cultural issues
and the needs of the various constituencies, which both we and
your management team considered very important to the success of
the transaction. During the April 10th meeting, it was clearly
communicated to Chrysler management, and they understood, that
time was of the essence.
In order to address the needs of labor, one of the most
important constituencies, our proposal included the following
features:
* Twenty-percent ownership of the company to be given
to the employees at no cost.
* No concessions from the employees. In fact, we
discussed improving long-term security for the
employees by guaranteeing pension contributions and
providing other assurances.
* Five-percent ownership of the company to be given
to management at no cost.
On Tuesday, April 11, 1995, immediately after reaching our
decision to extend the offer, I called you to notify you of our
intention to proceed. At this time, we discussed the form of the
response you would make.
We were and continue to be shocked by your "surprise"
reaction to our announcement. As the foregoing chronology
indicates, your management team was kept fully informed at all
times. As you know, we never intended, and still don't intend,
for this transaction to be hostile. You turned it into a hostile
transaction.
Yesterday, you sent me a letter accompanied by a press
release. Both your letter and the press release are so replete
with contradictions and omissions that I feel compelled to set the
record straight:
* Nowhere in the letter is there a statement
regarding the adequacy of our price. We believe
that it is unprecedented that a Board rejects an
acquisition proposal without dealing with what is
clearly its most
<PAGE>
Mr. Robert J. Eaton
April 25, 1995
Page 3
important aspect - price. Is this because none of
the three investment banking firms (First Boston,
Salomon Brothers and Morgan Stanley) being used by
Chrysler concluded that our offer was inadequate?
* The reason why the financing has not yet been
arranged is because Chrysler, presumably at your
direction, and even before the Board's rejection
of our proposal, has openly intimidated commercial
and investment banks into refusing to discuss the
financing of the transaction with us with threats
of both commercial retaliation and legal action.
Aside from the questionable legality of this
financial interference, I fail to see how this is
in the best interest of all shareholders. So I
find it very hypocritical on your part when you
say you "...have grave doubts that such a
financing is feasible."
* You state that "... it would be rash to strip
Chrysler of over 70% of its cash reserves, and
leave it vulnerable to the next downturn in the
business cycle". Again, this statement is
incorrect. By the time our proposed transaction
would close, Chrysler would have over $4 billion
in cash reserves after using $5.5 billion to help
finance the acquisition. As you must surely know,
during its worst downturn at the time of the Gulf
War, Chrysler used $4 billion over a 3-year
period. Our financing plan has prudently taken
this into account; even our worst-case scenario
does not show nearly this level of cash
requirement to weather a downturn. This is
because Chrysler is a different company today.
With 70% of its costs outsourced, it is much more
nimble and cost effective. Your letter contains
no explanation whatsoever of how your $7.5 billion
was arrived at. Why not $5 billion? Why not $10
billion?
* You state that "Chrysler's financial strength is
also essential to developing new products..." and
"... planned product spending alone over the next
five years is $23 billion." As you and your
management team have known for months, our
financing plan did not cut capital expenditures
for new products by one penny. In fact, our
proposal includes $500 million more in capital
expenditures than Chrysler's own plan. Knowing
this, for you to suggest that we are trying to
finance the
<PAGE>
Mr. Robert J. Eaton
April 25, 1995
Page 4
acquisition by sacrificing future product
development is simply incorrect. Why would we
want to make a $2 billion investment in a
"crippled company" that could not compete?
* You continue to call our proposal an "LBO" in
order to taint a proposal with a pejorative label
that simply doesn't apply. One reason why members
of your top management team found our proposal
"intriguing" (their word, not ours) as recently as
two days prior to our announcement is undoubtedly
because they clearly saw that, after our proposed
transactions, Chrysler would have less leverage
than either Ford or GM. In addition, it must have
been clear to them that the transaction was self
financing; that it, the company would be paying
interest instead of dividends and the free cash
flow would remain virtually unchanged. Frankly,
we fail to see how this puts Chrysler in harm's
way, particularly since our projections were
significantly more conservative than those of Wall
Street analysts.
* You state that "the primary objective of the
directors and management of Chrysler is to build
value for shareholders." Yet you have never made
a specific proposal to enhance shareholder value,
except in response to my letter to the Board on
November 14, 1994. Your new "plans" (obviously in
response to our offer) for share repurchases or
increased dividends are hopelessly vague and
noncommittal. Many great companies (GM, IBM,
Eastman Kodak, American Express, Borden) have
learned that it is wise to listen to their
shareholders. Why hasn't Chrysler learned that
lesson?
The key decisions regarding the future of Chrysler are being
made by a group of people who own less than 1% of the stock of the
company. Many of those people are not even employees. We have
been the largest shareholder of the company much longer than you
have been the CEO. Accordingly, we challenge you and Board of
Directors to permit the shareholders of the company to vote on the
following matters:
1. Do they favor the sale of the company at $55 per
share? If the shareholders do not support the buyout, we would
withdraw our offer.
<PAGE>
Mr. Robert J. Eaton
April 25, 1995
Page 5
2. Alternatively, if it is not believed to be desirable
to sell the Company for $55 per share, do the shareholders favor
an increase in the annual common stock dividend to $5 per share?
In presenting this alternative, it is worthy of note that,
according to our projections, which are more conservative than the
consensus of Wall Street analysts, a $5 per share dividend would
only utilize approximately 50% of Chrysler's projected free cash
flow. Clearly, based on these figures, you would not have to dip
into Chrysler's $7.5 billion cash reserve to maintain this level
of dividend payout.
Very Truly Yours,
Kirk Kerkorian
