Daimler AG has issued an announcement overnight, slamming Cerberus Capital Management LLC, the majority shareholder in Chrysler Holding LLC. Cerberus has followed up with an equally forthright statement. The upshot is Daimler believes Cerberus is being greedy and Cerberus reckons Daimler is shonky.

For those who came in late, Daimler-Benz and Chrysler 'merged' to form DaimlerChrysler in 1998. The American side of the blanket benefited in the area of product development. Without drivetrains and platform-sharing, there would be no Chrysler 300C, no Chrysler Crossfire (pictured), no Dodge Challenger or Charger, no diesel Jeeps.

But if there were product and manufacturing gains for the Chrysler brands, there was insufficient monetary gain on the Daimler-Benz side, so less than 10 years later the Germans sold 80 per cent of the Chrysler Group to Cerberus, retaining 19.9 per cent as part of the deal.

With the way the global economy has headed south in recent times, Cerberus is now left looking for ways of offloading Chrysler too, a little over a year after acquiring the American automotive group. Chrysler management has been engaged in a series of initiatives to improve the group's productivity and efficiency (more here) and is said to be in discussion with industry basket case, General Motors, with a view to merging the two companies' operations (more here and here).

One of the stumbling blocks on the path to such a merger is the fact that Chrysler's still partly owned by Daimler AG (the renamed German corporate entity left after the split-up of DaimlerChrysler, more here). For Chrysler and GM to merge, Cerberus must acquire the remaining Daimler-owned shareholding in Chrysler first.

That looks like it's just become a little harder, based on the tersely-worded release from Daimler AG. In the release, mention is made of "exaggerated demands by Cerberus", which apparently "exceed the value of Cerberus' investment in Chrysler".

Daimler is, it would appear, offended too by unspecific allegations levelled against Daimler by Cerberus, which revolve around "conduct outside the ordinary course of business by Daimler during the time between signing and closing of the transaction" and the provision of "incomplete information about the business".

The release finishes on a note of high dudgeon: "Daimler rejects these absurd allegations and the claims derived therefrom as being completely without substance."

For its part, Cerberus has responded with its own statement, in which the company accuses that Daimler "intentionally and materially breached its obligations under the relevant contracts relating to the Chrysler transaction".

Cerberus goes into some specifics, outlining "misrepresentations" in connection with "underwriting practices" for "vehicle acquisition financing and leasing" and other lending and leasing practices.

Cerberus further claims that Daimler has refused to acknowledge that these misrepresentations are -- in the view of Cerberus -- somewhat dodgy, if you'll pardon the reference. According to Cerberus, Daimler's behaviour has exacerbated the ill effects of the current economic climate for Cerberus and Chrysler. Describing the corporate standpoint as "disappointed" in the face of Daimler refusing to "negotiate in good faith", Cerberus concludes its statement with: "Accordingly, we are considering our strategic options and will have further comment after assessing the effects of Daimler's recent actions".

So you could be confused for thinking that both parties are ready to walk away from the negotiating table, but on the contrary, this brinkmanship appears to be just the sort of frank and cordial exchange that puts both parties in the proper frame of mind to settle.

Expect the disharmony to be ironed out within days and both the respective CEOs to take part in a photo opp, shaking hands and smiling.

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