Would Daimler (DCX) Take Chrysler Back? Yes.

The last month has not been a good one for shareholders of DaimlerChrysler (DCX). Its shares are up 5% compared to a little under 10% for Ford (F) and 20% for GM (GM). Wall St. would think that, without the money losing Chrysler, investors would warm to the stock. But, the shares are off again this morning.

But, as interest rates rise, raising the money may becoming more and more difficult for Cerberus, the hedge fund that is taking an 80% interest in Chrysler. Due to conditions not to its liking Cerberus has already walked away from a deal to buy a controlling interest in car parts company Delphi.

There is a possibility that Daimler could end up having to hang on the Chrysler. And, that may not be such a bad thing.

With Chrysler would come the Cerberus play-book. Eliminate a lot of middle management jobs. Let the Chinese build the company’s smallest cars. Beg the UAW for the kinds of concession that GM an Ford will probably get.

JP Morgan upgraded Ford and GM yesterday, primarily because it believes that the UAW will give back a lot of pension and health benefits in the fall negotiations. The theory behind the upgrade should apply to Chrysler as well.

That makes the US car unit a bit more attractive than it was six months ago.

Douglas A. McIntyre can be reached at [email protected].