DaimlerChrysler Unit To Merge With Detroit Diesel Corp.

The North American unit of DaimlerChrysler AG plans to purchase Penske Corp. affiliate Detroit Diesel Corp. (DDC), a once-floundering company that manufacturers heavy-duty diesel and alternative-fuel engines, automotive diesel engines, and engine-related products. DaimlerChrysler North America Holding Corp. (DCNA) currently owns 21.3% of Detroit Diesel and has made an offer to purchase the rest of the company. Penske owns nearly 50% of the company, and said it would sell its shares to DCNA. "Before we formed the company, there were large losses, morale was poor, and on-highway market penetration had declined to 3%," says Penske Chairman Roger S. Penske. "Through hard work, the DDC team restored Detroit Diesel's leadership position in the industry. We believe the merger with DaimlerChrysler will allow DDC to achieve its full potential."