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It's official - Cerberus buys Chrysler

KCRamKCRam Mt. Arlington NJPosts: 3,516
edited March 2014 in Chrysler
Daimler Press release:
Cerberus Acquires Chrysler

kcram - Pickups Host
«1345

Comments

  • seminole_kevseminole_kev Posts: 1,722
    Well this is certainly interesting. Wonder what the future holds.......
  • british_roverbritish_rover Posts: 8,458
    Hear it on NPR this morning. Mercedes retains 20% of chrysler but chrysler's pension and healthcare liablity remains Chrysler's problem.
  • steverstever Posts: 52,462
    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
  • lemkolemko Philadelphia, PAPosts: 15,306
    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: 8,458
    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: 48,533
    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 Sonoma, CaliforniaPosts: 64,490
    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.

    MrShiftright
    Visiting Host
  • gagricegagrice Pahrump, NevadaPosts: 31,443
    So many times the corporate pieces are worth way more than the whole corporation.
  • british_roverbritish_rover Posts: 8,458
    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 Posts: 52,462
    Another blurb about the buyout:

    Cerberus to take majority stake in Chrysler (Straightline)
  • 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 Sonoma, CaliforniaPosts: 64,490
    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.

    MrShiftright
    Visiting Host
  • british_roverbritish_rover Posts: 8,458
    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 Pahrump, NevadaPosts: 31,443
    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: 8,458
    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 Philadelphia, PAPosts: 15,306
    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 Sonoma, CaliforniaPosts: 64,490
    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.
  • british_roverbritish_rover Posts: 8,458
    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: 8,458
    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: 8,458
    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)
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    I like the optimism in those words, but I got real nervous when I saw Virgil Exner and "the China card" in the same paragraph. Maybe it's just me, but this sounds like very wishful thinking, as if Chrysler were like the poor man who reads in the paper one day that a famous violinist just received $50,000 for one performance. And so he slams the paper down on the table and says "That's it! I'll become a violinist!"

    I wish Chrysler well and all that, and the people whose jobs depend on it, but I'm not seeing the magic rabbit or the hat it's coming out of. So many dreams have been broken in China already, waiting for the "payoff" from those 1.3 billion people....who are, disturbingly, not buying stuff like crazy but rather saving up the money they make from us, and then lending it back to us.
  • elroy5elroy5 Posts: 3,741
    Nice speech. Very inspirational. What Chrysler (and GM, and Ford for that matter) need to concentrate on, is building durable, fuel efficient, and smooth running 4 and 6 cylinder engines. In today's economy, car shoppers don't want to hear about the "Hemi power". All they think about when they hear the word Hemi is "Gas Guzzler". What are people buying? 4 cylinder Camrys and Accords. The Hemi powered tanks are not what the consumer is looking for, obviously.
  • boredbored Posts: 300
    Um, the Liberty does not have a Mercedes supplied diesel, and never has had one.

    The Grand Cherokee on the other hand... yes it does.
  • douglasrdouglasr Posts: 191
    ...the compliment appreciated. There's no doubting that Mr. LaSorda has his work cut out for him. Very tough choices, and not that many cards to play on the table. The stakes far higher now...for all the 83,000 plus people at Chrysler.

    ...it's a curious fact that Buick sells more cars in China than they do in America...that's a big problem...as my friend from Shanghai asked me: "who buys Buicks in America...." There's no ignoring the fact that China is the second largest market outside America...and that Chinese like American cars. And...that the competition is using the mainland as a base of cheap labor for export, especially given the undervalued currency. Yet Chrysler LLC will have to play their cards close to the chest, shrewdly, and win. Basic products like the 300 that sells 10-13,000 cars a month like clockwork make for a profitable company. Magna-Stehyr builds them in RHD drive guise for export to Commonwealth and Asian market companies. So that's one advantage...

    ...but many more must follow. LaSorda & Co can't ignore China, especially if they want to sell a car below the $15,000 entry level bracket. That's the only reason why I bring up the 'China Card'. If Chrysler doesn't, someone else will checkmating any chance they have to make a profit selling a baseline car. But the mid-level and premium cars must necessarily be built in America. And that is where Mr. Gettlfinger and Hargrove must play a role. Imperials, Challengers, etc. must be made in North America, be it Brampton, or Jefferson Avenue, or even a new dedicated plant...if for no other reason than to re-establish American quality as a watchword on the road.

    Sure, the Exner era is long passed at Chrysler, the exhuberant optimism of 1950's designs could never be duplicated even today. (How many would buy a retro copy of a 1959 Cadillac?) But the success of the Gilles Team designed 300 says there is a dormant voice responding in the marketplace to traditional American designs. That is what I mean by "making Exner blush"...a hint here an there of that exhuberance can never hurt. Lacking it is why Lincoln is in the doldrums. Cadillac has made its march back with its own ethos, and quality of engineering and performance they have long been lacking.

    Quite simply the reconstituted team at Auburn Hills has the hardest job in the world: to prove themselves all over again to the buying public. Talking about Quality Being Job 1 will not suffice, much less peans of praise to hybrid vehicles, or proclaiming specific build numbers for various types of fuel efficient cars. The trust has to be enhanced once again between the company and the public. And the cars simply can't self destruct at 40,000 miles. The competition is looking over their shoulder. Packard died because buyer confidence was eroded in the product along with diluting the quality of the brand. Chrysler has to avoid those pratfalls.

    In this ugly reality the team at Chrysler simply can't continue as "business as usual" because that Automotive Game is over. The infrastructure of the cars, wiring, computer software, switchgear, plastics, etc., (made by 65% of outside suppliers) simply has to be seemless in its perforance. The days of letting the customer finish the development work are over, customers will not tolerate that. Why I simply state that a great chance is now in the offing. It is not violin music that I want to hear...but the raw sound of power to the pavement.

    Otherwise...why are they showing up for work at Auburn Hills, if not to challenge, to invigorate, to set a standard...? I wouldn't want to be a young designer or engineer having to explain in three years time, "yeah I had to design THAT" by way of exculpation for poor product.

    Where is the pride? That is the true challenge...

    Men and women at Chrysler can put it back into the product so that the workers rush to make it right going down the line. And those workers are not taken for granted...but an integral part of the program, as they are at Crewe building Bentley's under Manufacturing Chief Engineer Douglas Dickson. New Chrysler's don't have to match Crewe for product, but they can in enthusiasm the workers hold for and verve for design.

    That's what's needed to beat the competition...and that's more than violin music.

    DouglasR
  • lemkolemko Philadelphia, PAPosts: 15,306
    When I hear the word Hemi it is like the voice of God himself! What are people sheep buying? 4 cylinder Camrys and Accords. Leave those appliances for the non-enthusiasts. Build my Ghia Imperial Hemi STRT8 R/T NOW!
  • kdhspyderkdhspyder Posts: 7,160
    The word HEMI gets the enthusiasts shaky and wide-eyed. And after the 12 of them have bought their fill... it doesn't make any money.

    Changing what the market has been saying for 20+ years is like screaming for the wind to stop. From the early 80's til now more than 50% of the market has switched or added a 4c appliance ( or two - or three ) to the personal fleet. To believe otherwise is to ensure failure. Fighting the market is a sure loss.

    This is only about making money...nothing else.
  • harrycheztharrychezt Posts: 405
    Chery comes to mind, as in the "deal" for Chery to build the Hornet, and another small car, supposedly, for USA by end of 08, or early 09, for Chrysler(Dodge)?

    Wonder what will become of this "deal"?
  • bumpybumpy Posts: 4,435
    But the mid-level and premium cars must necessarily be built in America.

    Not when China can build BMWs, a beter Lacrosse than we get, and a Park Avenue that we won't get.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    I think American car companies are too prone to "sloganism" and don't do the hard work so well.

    Besides, Chrysler fired Exner (thank god).

    I don't think styling is the key here. Look at Toyota...world's dullest styling...but they do the hard work, which is: quality control, building brand equity, and (this doesn't hurt) a rather vicious competitive spirit that never ever quits.

    As for building entry level cars at a profit, this is another thing American automakers have never done well, so this too diminishes my hopes for Chrysler's future abroad.

    MrShiftright
    Visiting Host
  • nwngnwng Posts: 664
    look at how BMW sold minis. whoever is going to get jeep should borrower a page from bmw and let jeep to be a stand alone brand. Throw some money in to fix the interior and offer a full lineup of good diesel engines.
  • volvomaxvolvomax Posts: 5,274
    Remember,Mini was a clean sheet of paper operation.
    Jeep you have to take the good w/ the bad.
    Also,as long as the price of gas and diesel are similar in the US,you probably won't have many takers.
    VW didn't set the world afire w/ the Diesel Toureg.
  • gagricegagrice Pahrump, NevadaPosts: 31,443
    The VW Touareg would have sold good if they had put their V6 diesel instead of the V10 monster engine. Who needs an SUV that will do 0-60 in 5 seconds. The Grand Cherokee diesel is a better match of engine to vehicle. Now if they offer it in the base models. So far it is only in the $47k limited. My inclination is to buy the Mercedes SUV with the same engine.
  • oldguy70oldguy70 Posts: 97
    FYI, Cerberus held a meeting today in Detroit with senior officers in the UAW and CAW.
    Certain guarantees were given re maintaining current employment at least until the end of the current collective agreement--in Sept.08.
    Another commitment was a pledge not to piecemeal the company--apparently Cerberus intends to maintain Chrysler as a unit and not sell off any of its parts.
    Cerberus' stated objective is to get Chrysler as an entity back on its feet, and not to dissolve it as was thought.
    They are pledging to inject capital into the business as needed to help meet that goal.
    Sounds a little less pessimistic now?
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 64,490
    Sounds WORSE. I don't believe those people for a minute.

    This is typical corporate sloganism...it might be TRUE, but one thing I've learned about the "global economy" is that if things go sour, people leave the sinking ship faster than you can blink. If anything, the global economy is MORE volatile than the domestic economy ever was.

    If Chrysler starts to bleed heavily, it'll be dismembered so fast into black and red ink portions that it'll make the UAW's head spin. And they know this, too, I think.

    I think the company is in for a heavy re-org by year's end.

    Check this out. Most hard news comes from the foreign press anyway these days:

    UAW Braces For Worst

    There seems to be a lot of suspicion.

    Well it will just have to play out I guess....

    MrShiftright
    Visiting Host
  • nwngnwng Posts: 664
    these are takeover vultures. yes, vultures. The one and single goal of these "financial group" is to set a time table to turn a profit, clean up the balance sheet and sell/dismantle the company to the highest bidder.
  • m6vxm6vx Posts: 142
    The one and single goal of these "financial group" is to set a time table to turn a profit, clean up the balance sheet and sell/dismantle the company to the highest bidder.

    The only problem with this is that what parts can be sold/dismantled?

    - Assembly plants? The US already has way too many. Excess plants would be shuttered/torn down.
    - Engine/transmission/stamping plants? See above.

    - Jeeps/Trucks/Minivans/LX cars? Who would buy, and do you think they could get their money back on just this?

    I don't think busting up Chrysler makes a whole lot of sense. I think they're going to do something unique, something that publicly traded companies can't (or won't) do. The UAW should be worried.
  • douglasrdouglasr Posts: 191
    Yes, the numbers look bad. Chrysler lost E1.485Bn, roughly $2.04Bn on 642,200 sales---E2,312 per vehicle sold, or $3,176 per vehicle on Earnings Before Interest & Taxes. After EBIT Chrysler will have lost per vehicle what DCX made in net profit at E1,792 on 1.1Mn vehicles sold. Long term pension and health care benefits make the picture a dark one: with $18Bn liability, based on '06 sales that means the company is carrying an $8,084 per car burden---applied to any one year. Fortunately those cost are spread out, and the number drops significantly---but still on paar with GM's $1,539 per vehicle health & pension costs. Toyota, by contrast, "enjoys" a mere $407 per vehicle cost on the same basis. If GM had Toyota's H&P liabilities, GM would have made a profit per vehicle in Q1 of $1,211. If Toyota had the GM burden, their North American profit per vehicle would be essentailly the same as GM at $156 per car.

    No doubt former Treasury Secretary John Snow and Mr. LaSorda---the son of a union man---will have to establish an independent branch or firm to handle the pension and health care liabilities, booked apart from Chrysler, but allied with it. One idea being floated to cover both GM and Chyrsler (in part now wedded with Delphi and other parts suppliers) is to establish an independent insurance firm to cover their costs long term, which even Ford Motor might support.

    That would more or less level the playing field and leave workers secure to a degree that a Chapter 11 or dismantled Chrysler would not...and Chrysler could have a chance at profitability with an improved mix of cars and trucks. Mr. Snow, and Cerberus founder Mr. Stephen Feinburg would have to borrow (just as Ford and GM do) in the bond market to finance future product, apart from $5Bn start-up cash they are holding now. So it is a three year wait before results can be marked off, whether these gentlemen can be held to their word to "take the long term" view. That's three years of planning exciting new cars and trucks that people will rush down to see after the ads/photos flash on their blackberry's.

    Toyota made $18.86Bn profits on an average corporate sales price of $23,998 per vehicle sold...GM made a profit, albeit a slim one, at an average price of $21,072...so Chrysler needs to come in between or better than the two for survival. BMW AG, by contrast, sells 1.4Mn vehicles per year, yet books a profit per vehicle (EBIT) of E2,556 ($3,450) on an average sales price of E35,859 ($48,409), making the firm one of the most profitable behind Porsche in the world. Cerberus would be happy to make any profit, even $1 a car---which keeps the wheels turning---anything past that is gravy.

    That's why they have to go in both directions...provide a basic sturdy baseline car to attract first time buyers, and a halo car at the top of the range...as a Ghia Imperial might do...since there is now no Mercedes-Benz or (God forbid) Maybach connection. Relying on 50% fleet sales is a short term solution until new product comes along. This is not, however, like 1979...so the public will not be waiting with baited breadth for new K Kars. New products simply must surprise and entice the buyers at the same time, both on design, quality, and content for price.

    Chrysler can play the BMW card...finding niche markets for their products to make a tidy profit...making their products unique enough to differential themselves from Ford or GM, Toyota or Honda, etc. The "Gotta-Have-It" cars also have to come from the new team. These guys---Messrs. Snow, Feinburg, LaSorda and Co. have a real chance to do something exciting. All while fighting the horrible numbers crunching that means the difference between $1-plus profit per car or no profit per car.

    DouglasR

    (Sources: WSJ, FT; Chrysler LLC/DCX; Ford Motor Company' GM; Toyota; BMW AG; VWAG.)
  • nwngnwng Posts: 664
    I meant sell it as a whole or by piecemeal.

    Plants are being shut down because of the manufacturer's excess capacity, not every manufacturer is experiencing that.

    $7 bil is a bargain for the whole deal. I am wondering if the UAW's old contract with DC is still legally binding with the new owners.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    Ownership doesn't turn over until about the time the UAW contract will be renegotiated. LaSorda and crew will be doing the UAW negotiations, not anyone at Cerberus.

    The $7B is not a purchase price per se, it's an investment. it's the amount of money needed to make Chrysler "whole" and debt-free. The goal is to make Chrysler an attractive IPO in 5-7 years and reap the rewards then. If they're willing to invest in product and follow the lead of Toyota and Hoinda in terms of efficient cars that Americans will want to buy, they'll be fine.

    kcram - Pickups Host
  • nwngnwng Posts: 664
    but does cerberus "own" chrysler, in another words, can they appoint a CEO to run chrysler? Do they own all of chrysler's assets?

    If they are going to throw $7B into chrysler in different stages, who are they paying the money to if it's not going to product development. Did chrysler owed lenders lots of money? I thought that has to do with Diamler than anybody else. And say if they decided to sell jeep for $4B, can they do that and does that $4B goes to cerberus?
This discussion has been closed.