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http://news.yahoo.com/s/nm/20070514/...corrected_dc_1Quote:
Private equity firm Cerberus will buy the majority of DaimlerChrysler's struggling Chrysler Group for $7.4 billion, a fraction of the $36 billion deal that created the transatlantic car union nine years ago.
Damn.... that's a steal. I can't believe Kirk Kerkorian didn't buy it.... except for the fact that he might have run into govenment monoply problems since I believe Kerkorian now owns controlling interest in GM.Quote:
Private equity firm Cerberus will buy the majority of DaimlerChrysler's struggling Chrysler Group for $7.4 billion, a fraction of the $36 billion deal that created the transatlantic car union nine years ago.
:popcorn:
Now it makes sense....
The ace in Cerberus' hand appears to have been the hiring of former Chrysler Chief Operating Officer Wolfgang Bernhard as an adviser to help the deal.
Bernhard, who helped orchestrate the previous turnaround plan at Chrysler, has been seen around Chrysler's headquarters in Auburn Hills and seemed to be favored by Chrysler executives over other bidders.
:five:
Hey, howcome this thread was moved to Motorsports/Racing? Seems out of place? :ne_nau:
Moderators call......Quote:
Originally Posted by Scott Patterson
:nod:
From my favorite insiders....
A jolt of reality about the Cerberus-Chrysler Deal.
Detroit. After the sheer tonnage of blather and verbal hand-wringing that has been in the media over the last 72 hours, I would hope that readers of this column would be up to speed about the Cerberus Capital Management-Chrysler deal by now. But just in case you just can't get enough, I'm offering up a few more thoughts to consider about how this deal will really play out - because there's a huge gap between the public pronouncements and the reality of the situation.
Let's start out by defining the concept of "long term." Listen closely to the local media in this town and to other media sources around the country, and the prevailing opinion is that this deal will help save the company because Cerberus will use its private status to cut to the quick and get Chrysler's structural costs in order without all of the hand-wringing and obstacles associated with running a publicly-held company. And that after all is said and done, Cerberus is a "long-term" investor that stays focused on the goal and will do the right thing.
Maybe so, but consider this - the Cerberus attention span for this deal actually only extends as far as the contract talks with the UAW this summer. If Cerberus gets what it needs and what it wants from the UAW, then their attention span grows exponentially. If the UAW plays its strident "entitlement" card as if it's 1980, then all bets are off and Cerberus will part-out the company - despite all of its touchy-feely public pronouncements.
Is this the end of the UAW as we know it? If the UAW deigns to think that they're going into these negotiations from a position of strength and power, then we're talking Eve of Destruction-type scenarios here. In this global economy, the classic UAW position of entitlement and "getting what we deserve" is so obsolete and out of touch that it's excruciatingly painful to even contemplate. GM and Ford are going to let Cerberus do the heavy lifting here. Cerberus will present the UAW with a one-time, non-negotiable, "take-it-or-leave-it" package that will put the company back on track to profitability. The UAW will have to invest mightily in its own health care program as a key component of the deal - or else it's all over but the shouting.
Simply put, the UAW has to get their arms around the idea of reduced jobs, reduced pay and reduced benefits, or face the ugly alternative, which is no jobs at all. I have not seen one shred of evidence that the UAW actually "gets" this idea, however, as dealing with reality has never been its strong suit.
And one more thing that this Cerberus deal puts on the table?
It brings forward the heretofore unthinkable idea that the domestic auto industry could, in fact, function just fine in a world in which the UAW simply didn't exist. I am absolutely convinced that if the new Chrysler Holdings, GM and Ford got together and presented their package of reduced wages and benefits to the UAW and said that this is the deal, take it or leave it - and then locked the union out if it balked - there would be a lineup 20 people deep applying for every single job available at the reduced package price all around the country. The end of the UAW? Let's just say the fate of the union is hanging by a thread.
Cerberus is happy with the existing Chrysler management team. Sure it is. Again, despite public pronouncements to the contrary, this is the one aspect of this deal that's pure, unmitigated bullshit. No knock against Tom LaSorda personally - he's a good man and a gifted manufacturing guy, but he's never been CEO material, so this is one area where Cerberus will look to make changes. And those changes will come sooner rather than later. Count on it.
Cerberus is confident in Chrysler's present and future product lineup. Another bit of fiction here. Chrysler does have some strong product entries, but the overall outlook is messy. The Jeep franchise is looking better, and a new generation of its vaunted minivans will debut this fall, but the company is too overly-dependent on big trucks and SUVs to engender any real confidence at this point. The new Chrysler Holdings will have to pull out all the stops to get on an upward trajectory product-wise again - and the clock is ticking.
Cerberus is in this for the Big Picture glory of putting an American company back on its feet, helping the working men and women of Chrysler have solid futures, and delivering profitable returns when it's prudent - two years down the road at least. Sift through all of the public statements from John Snow, the Cerberus chairman and former U.S. Treasury Secretary, and you'd think that Cerberus is filled with Shiny Happy People brimming with endless and unwavering supplies of benevolent optimism for this deal, the future of Chrysler, and Truth, Justice and the American Way while they're at it. The Bottom Line? Cerberus is in it for the money. Yes, they're sinking a ton into Chrysler, but you can forget about all of the platitudes and puffery from the last few days and remember one fundamental thing about this deal (besides the money thing, of course): Cerberus has an agenda that must be met and a timetable in which to get it all done. If any of it falls through the cracks, they will part-out Chrysler so fast it will make your head spin.