Detroit's Zero-Sum Game

What is the value of Chrysler? Its former owner, Daimler, has put a number on it, and it is a big fat goose egg,

In reporting third-quarter results, Daimler has disclosed that its book value for its 19.9 percent stake in Chrysler has now been written down by 900 million euros, or nearly $1.2 billion. "The Group's proportionate share in Chrysler's loss reduced the carrying amount of its equity investment in Chrysler at September 30, 2008 to zero," Daimler says in a filing with the Securities and Exchange Commission.

To be sure, as the New York Times' DealBook notes, the write-down "is a matter of bookkeeping; the carrying value may or may not reflect the stake's value in an actual sale."

Indeed, Chrysler has some $11 billion in cash, which is one reason it may be an attractive potential merger partner for General Motors.

But is it is still a striking comedown from when Daimler made its bold transatlantic merger in 1998, acquiring Chrysler for $36 billion.

In 2007, Daimler sold 80.1 percent of Chrysler to the private equity firm Cerberus Capital Management. The deal was announced as $7.4 billion, but most of that involved Cerberus's investment in the business. Only $1.35 billion went to Daimler.

Since then Chrysler, like other automakers, has been struggling with a sharp slide in sales as the economy weakens. The Daimler report today also indicates that Chrysler lost more than $1 billion in the first half of the year.

That's a lot of zeroes.

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