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It's official - Cerberus buys Chrysler

245

Comments

  • kdhspyderkdhspyder Posts: 7,160
    Yes it owns 80% of Chrysler and it can do what ever it wants with it. I believe that Daimler had to kick in $700 Million at the end to cover outstanding debts. So Cerebus now owns it's 80% free and clear.

    Except of course the Legacy costs.

    Say if they can off load these costs to the union for say $25 Billion then they own it free and clear with no stockholders. Any money they make by selling off parts is theirs to keep. Ditto any future profits Chrysler makes.
  • urnewsurnews Posts: 668
    I seriously doubt there will be a Chrysler Corporation 10 years from now. No one knows what the future holds but if Mercedes couldn't turn Chrysler around, make it profitable, then who can?

    Nothing Chrysler makes even interested us in the slightest when we bought our 2007 SEL AWD Fusion in December 2006. I just don't see where having new "owners," particularly an investment group, is going to have a positive impact.
  • explorerx4explorerx4 Central CTPosts: 13,891
    i cribbed this from another site, but at the time of the merger, daimler was the one in trouble.

    "There's one thing everyone agrees on: Daimler screwed Chrysler royally. To understand how the desperation sale to Cerberus Capital Management could possibly happen to one of America's iconic car companies, you have to look at the history. Chrysler's merger with Daimler-Benz nine years ago was a disaster from the start. At the time, Chrysler was making a lot of money—something like $1 billion every quarter. The minivan was a cash cow. The Jeep Grand Cherokee and Dodge Ram pickup were selling like crazy. There were 4,000 profitable dealers, a brand-new $1.5 billion research center, and $12 billion in cash. Chrysler was the lowest-cost producer and the most profitable car company in the world, with sales of 2.5 million cars and light trucks. But it took Daimler less than a decade to drive Chrysler off a cliff."
    2017 Ford Fusion SE 2017 Ford F-150 Limited
  • kdhspyderkdhspyder Posts: 7,160
    I think that what you noted is pretty much accurate. MB does have to take responsibility for putting the management in place and giving Chrysler the direction it went for the last 5 years.

    Since 2001 Chyslers direction has been to generate cash and profits only from it's two core products, minivans and trucks. ( Did M-B need all the cash that Chrysler could provide in order to turn itself around? ). Now that M-B is back on good footing there's no need for the Chrysler cash cow...and oh btw we need $32 Billion to fund our Health and Legacy costs.

    "Well what if we sold the empty shell that was Chrysler and only had to come up with $18 Billion to fund the H & L costs?"
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    Here's the way I heard it expressed another way:

    Essentially, Daimler is paying Cerberus to take Chrysler off its money-bleeding hands. Cerberus will pay 5 billion to those Chrysler auto operations it will control. Daimler still covers Chrysler's losses before the deal closes, estimated to be around another 700 million bucks.

    As CNN Money asks: So what's in it for Daimler?

    This: they forgo any futher liability for future healthcare costs. As you know, Daimler also ditched the money-losing SMART enterprise recently.

    Not sure where the other 2.7 billion mentioned in the deal is going. Probably from Cerberus directly to Chrysler, maybe that part it won't control. Not sure about this yet.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    The $7.4B from Cerberus breaks down this way:

    - $5 billion to Chrysler Corporation LLC, the automaker
    - $1.05 billion to Chrysler Financial LLC, the auto financier
    - $1.35 billion to Daimler, who then returns $2 billion to Chrysler Corporation for a Daimler net outlay of $650 million

    As a Dodge owner for the last 11 years, I admit to having a rooting interest in Chrysler's success. As they will exist on October 1 (when they should complete the transaction), Chrysler will be the leanest of the Detroit 3. No bloated overseas luxury marques (Saab, Volvo, Land Rover), no duplicate brands (GMC vs Chevy truck), no experiments (Saturn), no dying brands (Buick, Mercury), and most important, no debt.

    They have a shot if Cerberus lets the car guys do their thing.

    kcram - Pickups Host
  • jchan2jchan2 Posts: 4,956
    Chrysler is in the unique position that they don't have any excess brands, like GM has (GMC, Buick, Saturn) or Ford (all of PAG).

    I do think that the Sebring needs a make over ASAP. The sedan is simply a disaster. The convertible looks ok, but the interior needs a drastic makeover.

    Chrysler needs to focus a lot of their work on improving fuel economy. As gas prices rise, consumers are going to be more sensitive towards fuel economy numbers, and Chrysler (and the rest of Detroit) is rather lacking in this area.

    Now a breakdown on what each brand needs to accomplish to become successful again:

    Chrysler

    Sebring needs a redesign, and ASAP. I know it just got one, but it's horrible.

    PT Cruiser replacement needs to be fast tracked, and I believe that it is on the way for 2009.

    I think the decision has been made to ax the Pacifica.

    Aspen needs to be axed. It was a creative way to use excess plant capacity at the Durango plant, but the large SUV market is shrinking daily and the Durango can handle any extra sales that the Aspen may have picked up.

    the Minivans (Dodge and Chrysler) are fine.

    The 300 is beginning to age, and a RWD redesign better be in the works. The formula worked the first time around, and they shouldn't mess with success.

    The budget for interiors needs to be increased.

    Dodge

    The Avenger just hit the market, and it looks much better than the Sebring. It's too early to decide on this...

    Nitro needs to be axed. Once again, creative use of excess capacity, and an excellent stop gap product, but I'm seeing quite a few Nitros in rental fleets, which is not a good sign.

    Caliber needs to make A/C and Power Windows standard. Few people skip those features these days...

    Charger/Magnum need to be reskinned; ala 300. And it better be RWD. Dropping the Magnum may not hurt, but it may not help, as it is a distinctive product that sells slowly.

    Grand Caravan is fine.

    Durango should either be given a light redesign or be scrapped. Leave the full size SUV market to GM, Ford, and Toyota to duke it out. (not enough potential sales to justify development costs)

    Ram needs a redesign. The new Tundra and GM products are far superior.

    Dakota could probably hold on for a few more years.

    Sprinter will probably be axed, as it was a Daimler product from the get-go.

    Jeep

    Ax the Compass. It's not a Jeep and never will be.

    The Patriot looks nice, save for the interior. Redesign it.

    The Liberty's redesign desperately needs the 4.0L from the Nitro. If the Nitro is axed, the two won't overlap.

    The Wrangler is fine.

    The Grand Cherokee could use a redesign.

    All Jeeps should offer diesels as an option.
  • urnewsurnews Posts: 668
    Well done. It's too bad your post isn't mandatory reading for the Chrysler hierarchy. It should be. Very insightful, in my humble opinion.
  • iluvmysephia1iluvmysephia1 Alamogordo, NMPosts: 7,615
    what's your take on the new Mini-Cooper fighter from Dodge called the Hornet? Early looks at it look promising, if the company that builds it can build it within tolerances and within budget. Dodge doesn't need any financial drains on it right now at all, from anywhere.

    I have bought a new Lancer GTS '08 from Mitsubishi and love it so I'm not in the marketplace, but the new Hornet looks rather cool to me.

    Dodge, keep the price around $15,000-$17,000 if you can and you'll sell a lot more of 'em.

    2011 Kia Soul Sport 5-speed

  • spoomspoom Posts: 85
    I imagine they will be able to hammer down a UAW deal far below the Ford & GM standards, possibly by greatly reducing retirement and other benefits for current employees and offering one-time early retirements for those who want to escape grandfathered-in. This way the current retiree financial load would literally die off, and they could compete better with Hyundai, etc. This is probably going to be looked at by vulturville as a one time opportunity and they'll play hardball and threaten a bunch of sell-off scenarios. GM & Ford will silently support them all the way because it'll pave the way for them. Heck, Ford is in much worse shape than Chrysler, if Ford goes under Chrysler gets some of that market share by default. I think most folks in the industry know the current big 3 packages can't compete with the new "foreign" plants on our own soil so I believe this will be the used as the starting point to smash the status quo of GM, Ford & Chrysler
  • jchan2jchan2 Posts: 4,956
    If they can do it without taking away from other projects (getting the Dodge crossover to market, improving current interior quality, etc.) I can see it competing well.

    I haven't heard much about it (either that or I haven't done much research into it) But as I recall it was a 2 seater roadster, correct? If so, then if Dodge can do it for $17-$22K , undercutting the Solstice on price, then they could steal quite a few sales. (and increase showroom traffic)
  • orangelebaronorangelebaron Posts: 435
    Maybe they can start building cars that last instead of cars that just look cool.
  • jchan2jchan2 Posts: 4,956
    I agree, but Chrysler has to start somewhere, and their strength has always been interesting designs. (at least until the past year or so; those interiors in the Caliber, Patriot, Sebring, and Compass are junk)
  • chuck1959chuck1959 Posts: 654
    First I'd like to comment on you remarks. The I have a question.

    Chrysler

    Sebring needs a redesign, and ASAP. I know it just got one, but it's horrible. I agree. But then again the Sebring sedan has never been a nicely designed car....I don't know why Chrysler can't get it right.

    PT Cruiser replacement needs to be fast tracked, and I believe that it is on the way for 2009. God the PT should have been replaced a couple years now.

    I think the decision has been made to ax the Pacifica. I haven't heard that.

    Aspen needs to be axed. It was a creative way to use excess plant capacity at the Durango plant, but the large SUV market is shrinking daily and the Durango can handle any extra sales that the Aspen may have picked up. I think the Aspen was built for the loyal Chrysler fans that were probably bugging the dealers.

    the Minivans (Dodge and Chrysler) are fine. Yes they are doing excellent.

    The 300 is beginning to age, and a RWD redesign better be in the works. The formula worked the first time around, and they shouldn't mess with success. I agree

    The budget for interiors needs to be increased.

    Dodge

    The Avenger just hit the market, and it looks much better than the Sebring. It's too early to decide on this... It looks a lot better than the Sebring that's for sure.

    Nitro needs to be axed. Once again, creative use of excess capacity, and an excellent stop gap product, but I'm seeing quite a few Nitros in rental fleets, which is not a good sign. I agree

    Caliber needs to make A/C and Power Windows standard. Few people skip those features these days... A/c and Power Windows not standard?...how wierd is that!

    Charger/Magnum need to be reskinned; ala 300. And it better be RWD. Dropping the Magnum may not hurt, but it may not help, as it is a distinctive product that sells slowly. I think their designs have held better that the 300 but could use a tweak here and there.

    Grand Caravan is fine.

    Durango should either be given a light redesign or be scrapped. Leave the full size SUV market to GM, Ford, and Toyota to duke it out. (not enough potential sales to justify development costs) I though they already did a light redesign.

    Ram needs a redesign. The new Tundra and GM products are far superior. I dunno I still prefer the Ram.

    Dakota could probably hold on for a few more years. Didn't they do a redesign for 2008

    Sprinter will probably be axed, as it was a Daimler product from the get-go. Thank god I hated that thing!

    Jeep

    Ax the Compass. It's not a Jeep and never will be.I never understood why Jeep thought they needed this vehicle.

    The Patriot looks nice, save for the interior. Redesign it. I agree

    The Liberty's redesign desperately needs the 4.0L from the Nitro. If the Nitro is axed, the two won't overlap. How could the redesign it without the 4.0L again what is Jeep thinking!

    The Wrangler is fine.

    The Grand Cherokee could use a redesign. True this last tweak just didn't do it. It looks the same.

    All Jeeps should offer diesels as an option. I think they are waiting until next year for a bio diesel to be developed, so they can market it in all states.

    My question since Chrysler is out of the fold will they still share with Dodge?
  • iluvmysephia1iluvmysephia1 Alamogordo, NMPosts: 7,615
    actually the Hornet is/was being billed as a 4-door mini-plug. With real rear doors that open up backwards and all. Oh yes. Just don't expect much room back there but who cares that much about room in the back? Well, yes, I guess some people do. Point is is that it's gonna be a 4-door with little room out back. I agree, the closer this little squirt is to $15,000 the more people they'll steal from potential Kia Rio customers, or Chevy Aveo customers, or Hyundai Accent customers, or....Mini-Cooper customers?

    Has the SmartForSomebody craze died down sufficiently so that we can fully concentrate on real cars again? Not nearly enough protection in those accidents-waiting-to happen rigs, IMO. I'd buy an Obvio! 828/2 before I'd even test drive a SmartForSomebody.

    2011 Kia Soul Sport 5-speed

  • nwngnwng Posts: 664
    the problem is chrysler's last big hit, the 300 was built on a old E series platform. Now that Diamler is gone, where is the new or refresh 300/charger/magnum be coming from?
  • 99tcamry99tcamry Posts: 15
    Jeep seems to have overdone it by having the Compass, Patriot and Liberty. They seem like they would all compete with each other.
  • jchan2jchan2 Posts: 4,956
    Wait a minute; who's they? Chrysler or Daimler?

    Chrysler probably has to share with Dodge, as the costs of developing three unique sets of platforms is just too cost prohibitive.

    I doubt Daimler wants to touch anything related to Chrysler given the state of their "marriage"

    I believe I read something about the Dodge crossover also spawning a Chrysler variant that would replace the Pacifica for 2009. I don't know where I heard this though...
  • dtownfbdtownfb Posts: 2,918
    Good post. The big problem I see with Chrylser is they have just released a bunch of vehicles that have received lukewarm reviews. And as you mentioned, fuel efficiency is lacking at a time when consumers are looking for it. Considering how long it takes for ideas and plans to get from the paper to the production line, I don't know if they can survive that long. Which is why the most likely scenario is strengthen certain brands and start selling to the highest bidder.

    You also have the UAW negotiations this summer which is always interesting.
  • tncarmantncarman Posts: 82
    Remember not to forget that it was not a TOTAL buyout. Daimler still owns something like 19.9%, and Cerberus has 80.1% That means that the next 300 could still well be on an old E-Class and the sprinter will most likely stay. I've seen alot of them, ugly but great cargo vans.
  • wtd44wtd44 Posts: 1,211
    The vicious guardian of Hades has stated that it will protect the integrity of "Chrysler Corp" did it not? That can change in the future, but I understand that the next two or more production years are being locked in as my keyboard wails.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    Here's where the new Chrysler Corporation can get the leg up. Being a fully private company, they don't have to answer to stockholders. They will start out debt-free and can spend profits on product instead of dividends.

    If they're smart, the UAW should play ball with the new Chrysler. Both entities will benefit greatly if they can develop cars and trucks consumers want faster than the competition. Chrysler can now have that "go for it" attitude they had in the early 90s that produced the Ram, Viper, the LH sedans, and the "cloud cars" that made all the cash that attracted Daimler in the first place.

    We won't see the results of the new "attitude" before 2010, but Chrysler could be the only US automaker poised to take on Toyota and Honda by then. GM and Ford are too bloated and inefficient - they're not in position to slim down enough.

    kcram - Pickups Host
  • fezofezo Manahawkin, NJPosts: 10,376
    I sure hope you are right, KC. You make a nice argument for it.

    My biggest fear in the whole thing is going after the quick buck by selling the pieces off. I like to think that this deal is structured to discourage that.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • jchan2jchan2 Posts: 4,956
    that Cerberus said they were in it for the long term and that they didn't want to dismantle it.

    Whether that's true is another story...

    But now that Chrysler is private they'll be able to move faster, since they don't have to answer to a large group of shareholders.

    I hope they get a 35 MPG car out on the market ASAP. The most fuel efficient car they have would either be the PT Cruiser or Caliber, both at 32 MPG highway which isn't enough for a compact car, even if it is a wagon/crossover/SUV type thingy.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    Hey fezo maybe GM will HELP by killing off their popular cars---they have a history of doing this....can we call the roll please?

    Buick GNX --

    '88 Fiero (finally got the car right)

    '89 Turbo Trans Am

    94-96 Impala SS

    LS-1 powered Camaro/Firebird

    '93 Cadillac Allante with Northstar engine

    By a STRANGE CO-INCIDENCE, that list represents the *only* 1980s GM cars worth anything today in the collectible car market.

    So there's hope for Chrysler AND Ford if GM continues its historical patterns. Struggle with a product, make a good car out of it after 3-4 years, and then discontinue it, and produce another imperfect car to perfect over time and discontinue.

    It's perverse, but it could be a silver lining. ;)

    MrShiftright
    Visiting Host
  • wtd44wtd44 Posts: 1,211
    :P Let's see... You seem to be saying that GM has had Gremlins, when I thought those were from American Motors.
  • fezofezo Manahawkin, NJPosts: 10,376
    That's pretty scary. It's almost exactly the list of what I'd like from that period of time from GM...

    I remember trying to talk my dad into a '93 Cadillac Allante with Northstar engine. He leased a DeVille. Go figure.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    No, I think AMC had a slightly different malady. AMC created some bad cars in the 80s and some average cars and kept making them bad or average, GM created some bad cars and some average cars in the 80s, made the bad ones great cars, and then stopped making those great ones and continued to make the average ones.

    So they got to the same place of mediocrity as AMC, Ford an d Chrysler in the 1980s, but it just look longer and cost more :P

    MrShiftright
    Visiting Host
  • fezofezo Manahawkin, NJPosts: 10,376
    I would be very hard pressed to name an AMC car that I thought was a really good car.

    I have a friend who many years ago owned a Pacer. Oh, what a pile of junk.

    Showing that people don't learn, he and his then wife went and bought a Renault Alliance! Their logic? The Renault dealer was the closest one to where the Pacer died!

    These days he's got a Camry but only because his dad left it to him in the will. Can't imagine what he'd buy these days. They don't make anything near as bad as a Pacer or an Alliance anymore.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • british_roverbritish_rover Posts: 8,458
    Have you ever seen the pictures of the next gen prototype Fiero they made for the 1990 MY.

    image

    They had the prototype all finished and never put it into production.
  • wtd44wtd44 Posts: 1,211
    Maybe we need to figure out if Cerberus is pronounced with a "K" sound or an "S" sound for the first letter. My online dictionary/research says it was a "K" sound in old mythology.
    Part deux: Those many years ago, Chrysler imported Simca autos from France. My father rescued a pair of them from a wrecking yard and kept them running as a hobby to replace insipid television of an evening. I spent a summer session herding one of those to and from a college campus. Aaaaah! The memories of Chrysler past... My Renaults did not share the Chrysler import pedigree. I suspect I'd do something similar, again, if Chrysler would!
  • iluvmysephia1iluvmysephia1 Alamogordo, NMPosts: 7,615
    I would give the Cerberus 'C' a 'S' pronunciation, if only because pronouncing it with a 'K' sound sounds dumb.

    And the new Dodge Hornet will no doubt only produce about 29-31 mpg on the highway with the 6-speed manual tranny because it will be too heavy to propel it any more economically.

    2011 Kia Soul Sport 5-speed

  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    Gee the kids just coming of driving age would have loved it, don't you think?
  • bumpybumpy Posts: 4,435
    It looks almost like a pocket NSX. Jeebus. :cry:

    It's okay, though. GM would have put some wheezy pushrod in it and sent it out to fight against DOHC turbo MR2s and Probes.
  • british_roverbritish_rover Posts: 8,458
    It waw supposed to get a Quad OHC 4 and the DOHC 3400 series motor that eventually went into the Z34 Luminia.
  • wtd44wtd44 Posts: 1,211
    The other night on the Speed Channel I watched a "shoot out" among the various classic muscle cars. The suspense built up and built up, as the show progressed through years and brands, just oozing out the nostalgia. It was great. And I was not disappointed in the end when Chrysler (of course!) won the whole thing, lock-stock-and-barrel. The tension got high when GM hit the 500 hp level, but it didn't last long when the HEMI nailed the lid on it by passing the 800 hp barrier! :shades:
    Now there's a heritage I appreciate.
  • Looks like there should be some 'collectible' cars out there that were made when MB & Chrysler were buddies.
    Get'em while they are sleepers!!
  • jchan2jchan2 Posts: 4,956
    A $80,000 Mercedes-Benz S500 4Matic is a collectible when it says "Assembled by DaimlerChrysler AG".

    :P
  • qbrozenqbrozen Posts: 26,415
    I didn't spot this discussion till now.

    anyway, i for one am sad to see the breakup. It is only in the last half a decade or so that chrysler was actually producing cars I would consider owning (and do own one, the pacifica). Before that, I only liked the trucks. I still REALLY want a Charger or Magnum. But if they have to resort to putting their unreliable 4-speed autos in it, I'm not interested!

    I also got my sister to buy a Caliber. I find it an impressive little vehicle and may even consider an SRT for myself. Is this car still going to happen? I don't think there is a daimler connection there, so maybe.

    So that's at least 4 car-based vehicles in their lineup that I found competitive for my dollars. I'd hate to see that all change again so soon.

    '10 Equinox LS; '08 Charger R/T Daytona; '67 Coronet R/T; '14 Town&Country Limited; '18 BMW X2. 49-car history and counting!

  • iluvmysephia1iluvmysephia1 Alamogordo, NMPosts: 7,615
    be the new world order Dodge Challenger. They have done the Ford T-Bird thing to it - a new version of a very popular car from the past - and they have managed to retain the muscular body style with some new body touches here and there. The powertrain remains another story for now as far as what Dodge will build in to it but, hopefully, they'll still build the new Challenger with the new ownership group.

    2011 Kia Soul Sport 5-speed

  • fezofezo Manahawkin, NJPosts: 10,376
    Well, the powertrain was the problem with the new Tbird as well. That or excessive weight. The thing was a cruiser but not a quick car.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • iluvmysephia1iluvmysephia1 Alamogordo, NMPosts: 7,615
    the new Ford Thunderbird done did just that. I don't know if Ford is even building that car any more. Heavy and also around $42,000 to purchase. Cerberus prices the new Challenger at $40,000 it will sink just as fast as Britney Spears' musical career.

    2011 Kia Soul Sport 5-speed

  • fezofezo Manahawkin, NJPosts: 10,376
    "I don't know if Ford is even building that car any more."

    They're not. Talk about screwing up a great idea. They LOOK great.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • iluvmysephia1iluvmysephia1 Alamogordo, NMPosts: 7,615
    I read in a car mag several months ago that Chrysler was going to charge around $40,000 for one of their new Challengers. Yikes. I have been wrong before, though.

    That flies mostly against the Chrysler pricing movement overall so maybe they envision the new Challenger as their new world order Prowler or something. That, although not really making much sense, might start to explain the pricing hike. Making it to be a baby-boomers prize along the lines of a Corvette or Viper.

    2011 Kia Soul Sport 5-speed

  • dsiriasdsirias Posts: 34
    I don't know cars all that well but I do know politics, and Cerberus is run by hard right GOP types who are in this to make money--either dismantling, or partnering with other companies (Chinese?) for outsourcing, or refurbishing for re-sale(Hyundai?)--depending on how their scenarios play out. Rest assured they have run simulations on all possible outcomes. Whatever public and official statements have been made should not be trusted. In 5 years, Chrylser will either not exist, or it will be making only a few domestic minivans and trucks. Everything else will be chinese or korean made IMHO
  • hpmctorquehpmctorque Posts: 4,600
    "In 5 years, Chrylser will either not exist, or it will be making only a few domestic minivans and trucks. Everything else will be chinese or korean made IMHO."

    Maybe, maybe not, but these decisions have more to do with business than politics.
  • qbrozenqbrozen Posts: 26,415
    well, the SRT8 probably would be $40k or maybe even more. But that's the same for the 300SRT8, magnumSRT8, and chargerSRT8, is it not?

    '10 Equinox LS; '08 Charger R/T Daytona; '67 Coronet R/T; '14 Town&Country Limited; '18 BMW X2. 49-car history and counting!

  • m6vxm6vx Posts: 142
    and Cerberus is run by hard right GOP types who are in this to make money

    Chrysler was worth 35 billion when Daimler took over. Cerberus bought 80% of the company for 7.4 billion, which makes Chrysler worth 9.25 billion now. And, most of the 7.4 billion went back into the company, not into Daimler's pockets. Cerberus has historically gotten a 22% return on investment, which means they need to sell their share for 9 billion (worth=11.25 billion), a 1.6 billion dollar profit.

    To do this, they're probably going to do some untraditional things, which would make sense since the 'traditional' things got the domestics in trouble in the first place.

    With the UAW talks coming up in September, I think we're in for some fireworks. Steve Miller/Delphi set the direction, and Chrysler will probably follow that. Getting labor costs in line with reality is probably worth 1.6 billion per year.
  • qbrozenqbrozen Posts: 26,415
    what somebody pays and what something is worth do not necessarily correspond.

    If I bought a house for $400,000 but it was appraised at $450,000, what's it worth? The answer is probably none of the above.

    Most people will say that something is worth only what someone is willing to pay, but that's not necessarily written in stone. It commonly applies, but not when you are talking about something that has value in its parts. Let me use GE as an example. Analysts say it has more value in totalling its parts than its current stock price would indicate. So if you bought 100% of GE's stock, you'd own the company for less than it is actually worth.

    '10 Equinox LS; '08 Charger R/T Daytona; '67 Coronet R/T; '14 Town&Country Limited; '18 BMW X2. 49-car history and counting!

  • iluvmysephia1iluvmysephia1 Alamogordo, NMPosts: 7,615
    I read in a car mag today that the base Challenger would run $25-$35,000 and the SRT8 would be the $40,000 Challenger. They're guessing production to start in early 2008 and the first ones arriving at dealer lots in the spring of 2008. And a 6-speed manual may be offered. I like how they've designed it's body...starkly close to the old muscle car from almost 40 years ago.

    2011 Kia Soul Sport 5-speed

This discussion has been closed.