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Daimler CEO Says Chrysler Won't be Auctioned: Paper

DaimlerChrysler will not auction off loss-making U.S. division Chrysler and could decide to keep the business at the end of a strategic review, Chief Executive Dieter Zetsche told a German paper.

The possible divestment of Chrysler "will not take the form of an auction process," Zetsche was quoted as telling German paper Die Welt at the Geneva car show in a story published on Wednesday.

Two sources familiar with the situation told Reuters last month that information on Chrysler would be offered selectively to potential buyers so that DaimlerChrysler avoids an outright auction in favor of a more flexible sale process.

This left open the prospect that no bid might be strong enough to complete a deal, both sources said.

DaimlerChrysler announced last month it was examining all its options for Chrysler, whose reliance on light trucks and sport utility vehicles pushed it to a loss last year amid high fuel prices.

"All options include the option of (maintaining) the status quo," Zetsche was quoted as saying in Die Welt.

A company spokesman confirmed the comments.

Private equity companies are closing in on Chrysler while rival carmakers in Geneva played down interest in the business.

U.S.-based buyout firm The Blackstone Group has approached Chrysler and been granted access to its books in preparation for a possible bid, a person familiar with the situation told Reuters on Tuesday.

The Detroit News reported that representatives from Cerberus Capital Management, another buyout firm, had met executives from Chrysler on Monday to consider a possible bid for the struggling automaker.

General Motors Chief Executive Rick Wagoner declined to comment in Geneva on whether the world's largest automaker was considering a bid for Chrysler.

General Motors has held preliminary talks with DaimlerChrysler about an acquisition of Chrysler or some kind of alliance with it, sources previously told Reuters.

Breakup Difficulty

Separately, Zetsche said it would be difficult to break up Chrysler, as analysts and other experts have speculated recently, due to an integrated production system that binds together its various brands, The New York Times said.

"Chrysler Group is very integrated," Zetsche said in an interview at the Geneva Motor Show, the Times said. "The technical lines, like platforms, do not go along the same lines as the brands. The less they are aligned with the brands, the more difficult it would be to think of any separation."

The Times said Zetsche emphasized that he was making an observation, not commenting on options for how DaimlerChrysler might sell the Chrysler unit -- a prospect it confirmed three weeks ago that it was considering. But his statement seemed to reinforce reports that