Magna Chairman Confirms An Offer For Chrysler

OTTAWA, May 9 — Frank Stronach, the chairman of the auto parts maker Magna International, confirmed Wednesday that his company and Onex, a Canadian investment company, have made a bid for Chrysler, the struggling American unit of DaimlerChrysler.

Speaking to reporters after the meeting of a horse racing and gambling company that he indirectly controls, Mr. Stronach said: “Financially, we have a very viable concept. We have major banks lined up.”

He did not say how much the partnership’s bid was worth, but whatever its value, it would not require Magna to take on debt.

“Keep in mind we have $2 billion of cash,” Mr. Stronach said after the meeting of the company, Magna Entertainment, in Toronto. “I would not gamble Magna away.”

Speculation about a Magna-Onex bid has been circulating for several weeks. The confirmation of the offer will probably prompt shareholder questions at Magna International’s annual meeting on Thursday in Toronto.

Mr. Stronach said that Onex and Magna want DaimlerChrysler to maintain a stake in the Chrysler unit, and he added that the two companies might include other partners in their bid.

Chrysler is the most important customer of Magna, which is based north of Toronto in Aurora, Ontario. The companies have an unusually close relationship.

Magna, for example, engineers and makes the interiors of Chrysler’s minivans and operates the paint shop at one of Chrysler’s assembly plants in Toledo.

In Austria, Magna builds complete vehicles for Chrysler and other companies including BMW, the Mercedes unit of DaimlerChrysler and the Saab unit of General Motors.

When Magna was having financial difficulties in the 1990s, Chrysler extended both formal and informal assistance to keep the company going.

Mr. Stronach said that he anticipated that DaimlerChrysler would reply to the offer within weeks.

“As far as we know, we’re still part of the picture; we’re still a contender,” Mr. Stronach said.

Reports have said that two private equity firms, Cerberus Capital Management and the Blackstone Group, have also made bids for Chrysler although neither company has commented on them.

Tracinda, the investment vehicle of the billionaire Kirk Kerkorian, announced a $4.5 billion offer for Chrysler in early April.

A spokesman for DaimlerChrysler, Mike Aberlich, said the company would not comment on the possible sale of Chrysler “until the process runs its course.”

Onex did not respond to a request for comment. It has recently successfully acquired, revamped and taken public some aviation component plants once owned by Boeing,

While Magna has twice developed prototype automobiles that it hoped to produce for a fully integrated manufacturer, the company has no experience when it comes to marketing to consumers or dealing with dealers.

In addition, Mr. Stronach’s corporate strategy runs somewhat contrary to that of Chrysler. His company is generally based on operating large numbers of small factories rather than the large plants that make up Chrysler.

If his bid wins, Mr. Stronach suggested that Chrysler would have to cut back even more than it has previously announced.

“Sometimes when you’re sick you’ve got to take some drastic measures,” he said. “What do we have to do to create a healthy patient?”

Chrysler lost about $1.5 billion in 2006 and has already announced a recovery plan that includes eliminating 13,000 jobs in the United States and Canada. Magna’s net income last year was $528 million, and it employs about 82,000 people.

Johannes Van Biesebroeck, a University of Toronto economist who studies the auto industry, said that Magna’s interest in Chrysler probably stemmed from its self-interest.

“I’m sure for now they just want it to remain viable,” he said. “They want to be around when things are happening.”

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