DaimlerChrysler AG has announced officially it is negotiating the sale of its loss-making Chrysler unit.

Chief Executive Officer Dieter Zetsche said at the company's annual general meeting in Berlin:

"We are talking with some of the potential partners who have shown a clear interest." "As announced on Feb. 14, we are open to all options for future collaboration with Chrysler," he said. "That statement is still true today."

"But it is also true that we need to keep all options open, and that I cannot disclose any details, because we need to have the maximum scope for maneuver."

"We'd be very grateful if DaimlerChrysler got rid of Chrysler," Henning Gebhardt, a fund manager at DWS Investment GmbH in Frankfurt, told Zetsche and executives at the company meeting. "DWS welcomes the fact that DaimlerChrysler is looking at all options."

German Daimler bought the US automaker in 1998 for $36 billion, but the changing winds in the automobile market have driven Chrysler into making $1.5 billion in losses in 2006. Alliances followed with Mitsubishi Motors Corp. and Hyundai Motor Corp.

"The crucial factor was the unforeseeable shift in demand to smaller, more fuel-efficient vehicles which was triggered by increased gas prices in the US," Zetsche said on Wednesday to the ~9,000 shareholders.

It's rumored that companies such as Canadian auto-parts supplier Magna International have now bade less that $5 billion for Chrysler. Cerberus Capital Management LLC is said to also be interested in Chrysler, as well as a grouping of private equity firms Blackstone and Centerbridge. Bids from private equity firms could face strong opposition from DaimlerChrysler's unions in both North America and Europe, due to the possibility they will dismantle Chrysler to get more money off it.

Those buyers "are out to increase their wealth by stripping and flipping the companies," said United Auto Workers President Ron Gettelfinger.

"Mr. Zetsche, you have reversed the value destruction trend among management but you have to keep going," said Lars Labryga, a spokesman for the SdK shareholders association. "We're counting on you to make the sale of Chrysler happen and to get a good price."