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It's official - Cerberus buys Chrysler

KCRamKCRam Mt. Arlington NJPosts: 3,516
edited March 21 in Chrysler
Daimler Press release:
Cerberus Acquires Chrysler

kcram - Pickups Host
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Comments

  • seminole_kevseminole_kev Posts: 1,722
    Well this is certainly interesting. Wonder what the future holds.......
  • british_roverbritish_rover Posts: 8,476
    Hear it on NPR this morning. Mercedes retains 20% of chrysler but chrysler's pension and healthcare liablity remains Chrysler's problem.
  • steverstever Viva Las CrucesPosts: 40,805
    Notes from the Wall St. Journal:

    Slash and burn. LaSorda stays on and the plan to cut 13,000 jobs and close one factory remains in place.

    Cerberus owns 51% of GMAC so they'll try to drive financing to that company.

    The retirement and health care liabilities get folded into a holding company (the pension fund is significantly overfunded at the moment).

    The UAW supports the acquisition (it's hard to call it a sale to Cerberus - more like MB is paying Cerberus to take Chrysler off its hands).

    WSJ registration req'd link

    Cerberus has stakes in a bunch of other companies, including Formica -- maybe we'll start seeing some interesting dash treatments in the near future? :P

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  • lemkolemko Posts: 15,185
    In Greek mythology, Cerberus or Kerberos (Greek Κέρβερος, Kerberos, "demon of the pit") was the hound of Hades, a monstrous three-headed dog (sometimes said to have 50 or 100 heads) with a snake for a tail; he was also seen with a dragon's tail and serpentine mane.

    Cerberus guarded the gate to Hades and ensured that spirits of the dead could enter, but none could exit.

    Could this mean that Chrysler has died and literally gone to h***?
  • british_roverbritish_rover Posts: 8,476
    I always wondered why you name a company after Cerberus the hell hound. Considering what Cerberus the company does to what it buys, kills and dismembers for the most part, I guess it makes sense.
  • seminole_kevseminole_kev Posts: 1,722
    Somebody go turn on the "bat signal" for Andre......
  • fintailfintail Posts: 33,791
    Hopefully MB can stick to working on recovery now.
  • lokkilokki Posts: 1,200
    "Mother of Mercy. Could this be the end of CHRYSLER?"

    image
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,021
    How is the stock market reacting to all of this?

    My initial impression, based on nothing but gut feelings, when Chrysler joined up with Mercedes was that that was a big mistake.

    My impression now, based on nothing but gut feelings, is that Chrysler is screwed and is being measured for a coffin.

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  • gagricegagrice San DiegoPosts: 29,018
    So many times the corporate pieces are worth way more than the whole corporation.
  • british_roverbritish_rover Posts: 8,476
    Yup Jeep on its own is worth a fair amount. I bet cerberus makes back most of their investment just divesting themselves of jeep.
  • steverstever Viva Las CrucesPosts: 40,805
    Another blurb about the buyout:

    Cerberus to take majority stake in Chrysler (Straightline)

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  • oldguy70oldguy70 Posts: 97
    The price of Cerberus stock has gone up a couple of points following the announcement.
    Private equity firms like Cerberus are noted for breaking up their purchases and selling them piecemeal.
    That's not to say it'll happen here, but I would think the odds are pretty good that it will.
    These types of predatory businesses are notorious for their "flipping" practices. Not a good thing, I think.
    The UAW says this is good for Chrysler employees. The CAW (Canadian version) says it isn't a good thing for employees.
    It's early in the game --the ink is still wet. We'll just have to wait and see how the scenario plays out.
    All things considered, is anyone really surprised at the outcome?
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,021
    I'd sell Jeep whole to Harley Davidson or some other conservative, sober company that knows how to market an average product brilliantly, (look what BMW did with MINI) and then just dismantle the rest of the company for parts.

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  • british_roverbritish_rover Posts: 8,476
    I actually think BMW wouldn't be a bad buyer for Jeep. That was my first thought if BMW is looking to stretch their legs a little bit.

    Then my second thought was how the BMW aquisition of Rover didn't turn out so great so maybe BMW buying Jeep is a bad idea.
  • nwngnwng Posts: 664
    I think big H might be interested. There's your street cred with a bof vehicle. Does Jeep have a common rail diesel engine in europe from DC?
  • gagricegagrice San DiegoPosts: 29,018
    The current Grand Cherokee is offered with a 3.0L diesel from Mercedes. A Wrangler with a diesel would be ideal for me.
  • british_roverbritish_rover Posts: 8,476
    Yeah they do and I think it is going in the Grand Cherokees for next year.

    Not many jeeps are BOF anymore though. Just the wrangler I think as all the rest are care based from the Caliber or on their own unique platforms.
  • volvomaxvolvomax Posts: 5,274
    Dunno if that is a great idea.
    Harley prob doesn't want the headaches of Jeep.
    Plus, w/ gas prices as they are, who can say that Jeep would be profitable in the future?

    The only company that makes any sense at all to sell Jeep to is Hyundai.
    They have the capital to run the co,and they have no full size SUV's of their own.
  • nwngnwng Posts: 664
    the use of MB diesels itself is worth the ticket to get Jeep, if it is going to be sold. I thought the liberty is sold in europe with mb diesels.
  • nvbankernvbanker Posts: 7,285
    Yup Jeep on its own is worth a fair amount. I bet cerberus makes back most of their investment just divesting themselves of jeep

    Not as much as it once was - "Trail Rated" has become a joke, with FWD Jeeps that are really a Dodge Nitro under there, Woosefied Grand Cherokees, and the "Family Truckster" Commander with absolutely no more room inside, but plenty of cladding on the outside to make it look big.

    Chrysler has done plenty of damage to Jeep and the Jeep image. If I were going to buy Jeep today, I'm not sure what I do with it, actually. Jeep should never have been a full line of cars.
  • lemkolemko Posts: 15,185
    Wrangler
    Serious off-road Cherokee
    Wagoneer
    Pickup truck

    That's all

    I did like those cool 1957-65 Forward Control Jeeps, but it proved they were more poular in foreign markets than NA.
  • volvomaxvolvomax Posts: 5,274
    If Jeep were spun off,would M-B supply engines to the new entity?
    When Ford bought Land Rover,BMW stopped supplying engines.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,021
    Well Harley was on hard times until they got Marketing Religion...I can't imagine Jeep having a worse reputation than Harley did in the 1980s. As for BMW, yeah, Rover was a disaster but at least they bailed and hit a home run with MINI. So they still had "the touch"

    Jeep is one of those "magic" names, like Harley, Corvette, Coca-Cola...it would take a lot to totally destroy it (although I have to give credit to GM for almost annihilating Cadillac and Daimler-Benz for smearing mud all over the Mercedes name.)

    I don't think a Japanese company can market Jeep. It should be an American company like Harley or maybe GM.

    Harley could do the "meet people" trip and cut the Jeep line down to iconic styles only...maybe the Wrangler and a retro Wagoneer and that's it.

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  • british_roverbritish_rover Posts: 8,476
    The FWD jeeps are really calibers under the hood and yes they are a joke.

    The Liberty spawned the Nitro not the other way around although the nitro has a different wheelbase and track then the Liberty so they don't share much.

    The commander is also a joke but it is being discontinued. Like shifty said it would be very hard to kill the Jeep name.
  • british_roverbritish_rover Posts: 8,476
    BMW kept supplying engines to Land Rover untill the middle of 2005. The Range Rover used the 4.4 liter V8 out of the X5/540i/740i through the 2005 MY.
  • volvomaxvolvomax Posts: 5,274
    Right,but that has ended now.
    The question was whether Mercedes would supply the diesel if Jeep were spun off.
    I used BMW as an example of the "no" answer.
  • volvomaxvolvomax Posts: 5,274
    I doubt that Jeep would be profitable with just 2 models.
    In fact,I seriously doubt it.
    That is why there are so many Jeep models now.
  • british_roverbritish_rover Posts: 8,476
    Exactly the dealerships themselves couldn't survive with that many models either.
  • douglasrdouglasr Posts: 191
    "You'll sell this car all right, Walt, $94, I guess if we can get a bonus..." Chase Manhatten Bank CEO Ed Tinker told Walter P. Chrysler sitting in the prototype Chrysler in the lobby of the Commodore Hotel in New York City January 6, 1924.

    Chase Securities had withdrawn support two months before, but came back to deal when they saw the product. $7.5Mn (Chase buying Maxwell Motors shares) fueled the rise of the Chrysler Corporation of America, and the begining of an American Legend. That same $7.5Mn worth $88,552,000 in 2007$. A bargain for a car company, and a product. Mr. Snow has just paid 1,000 times the 1924 investment price for Chrysler. Mr. Snow will be roundly attacked if he leads a Chrysler break-up of assets, especially as the new firm carries no debt, despite its pension liabilities. Mr. Snow has stated that he has "confidence in Chrysler, and U.S. Auto manufacturing." History will hold him to his words. The "marriage made in heaven" has come into separation, divorce, but left Chrysler stronger for it, and new direction for the firm.

    It is not a moment to tears, this is, ...and let's be clear about this, a great moment in automtive and American Business History. Without Mercedes-Benz, Chrysler sold 2,140,651 vehicles in the U.S. last year, and its overseas saled increased 15%, rising fast in China. The China card for Chrysler holds the key, as it does for GM,and (what is left of) Ford Motor. Walter P. Chrysler slammed the door of Alfred Sloan's office when he left GM...Mr. Snow and MR. LaSorda have just reopened another door in automtive history. This time it might slam on a new Imperial...new Dodge cars made in China, new Challengers, Chargers, and a breed of new products made to gain acceptance and wow the public. The Chrysler Boys can take a good look at Walter P. Chrysler's hand made tool chest sitting in the lobby of Auburn Hills. They need to pick up the chalice and calipers...and build great cars again.

    This is the moment for Chrysler to rise to fate and history...damn the horsepower, full speed ahead....and build cars to make the American name mean the top most in the market, to shame the competition into copying them. To remind Americans of the great motoring history that has been ours to cherish, and shall yet be again. To remove from the mundane task of driving the boredom long associated with hordes of some imported cars. To make the name conjure the verve and dash that would make even Virgil Exner blush. Men may no longer wear hats, as K.T. Keller once preferred, but we "put them on" when we drive...and our wallet and right foot control...but there has to be something there to appeal, to entice and to want.

    Walter P. Chrysler tore his Locomobile apart many times to master its intricacies before he learned to drive it. Mr. LaSorda needs no introduction to cars, but Mr. Snow does...and now he needs to "tear apart" the latest Chrysler to understand how it all comes together---who designs them, who engineers them, which suppliers control the quality within them, and ultimately, what the 30 plus hours of assembly time labour conjured within the various plants can achieve....and perhaps build a few cars worth of a 100 hours or even 150 hours labour time to build...

    ...a Ghia Imperial will do nicely...or revive the Duster name for a sturdy economical "can do" car priced to counter the oceans of Hyundais...Corolla's etc. So many possibilities, so many choices....from Jeep, to Dodge, to even a revived Plymouth, to a renascent Imperial...the new gang at Auburn Hills have only excitement to create.

    ...and they have the tough task of re-igniting the labour-relations within an Automotive firm, if they are not to strangle upon the liabilities of the generations who loyally worked for Chrysler, for Keller, Townsend, Iaccoca, Eaton, and Zetsche...Mr. Gettlefinger and MR. Hargrove have their work cut out for them, and it is all waiting, wanting, and necessary if great cars are to be built again at Chrysler.

    For a time Chrysler Corporation was Number Two in America, before Ford regained itself in 1949-50. But now the new automotive game has changed, and the old rule-book is long gone. Mr. Snow can not be seen to have become the Roy T. Hurley of Chrysler...offering a like "management contract" which straddled Packard in July 1956 imposed by Curtiss-Wright that later led to the demise of both Studebaker-Packard and eventually Curtiss-Wright. It is time for the new team at Auburn Hills to write a page in American Automotive History---one they will not be ashamed to introduce or retell---when the day is done. Being "First" has many meanings now since that January 1924 day in the Commodore Hotel, and Chrysler LLC now has the chance to define the meaning of that term all over again...

    Bill Ford Jr., are you watching???

    DouglasR

    (Sources: DaimlerChyrsler AG, Chrysler LLC, 'Chrysler' Vincent Curcio, Oxofrd University Press, 2000)
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