Cerberus will own 80.1 percent of the Chrysler Group
Let's hope not!
Cerberus will own 80.1 percent of the Chrysler Group
May 16, 2007
After months and months of conjecture and rumors, the drama is finally over. The Chrysler Group has been sold to Cerberus Capital Management LP for $7.4 billion dollars. This also means that Chrysler is the first of the big three that is privately-owned.
Cerberus will own 80.1 percent of the company, whereas Daimler will continue to own the remaining 19.9 percent (for what reason, we cannot say). By transfering the new holding company -- to be called Chrysler Holding LLC -- to Cerberus free of debt, Daimler has to foot an additional bill of $1.6 billion. Cerberus will be on the hook for pension and health care obligations, however.
In terms of the future, things look pretty muddled. Cerberus is known for buying companies on the brink of bankruptcy and then "instituting drastic measures to make them profitable again." Could this mean the selling off of certain brands to the highest bidder? (Selling Jeep to GM comes to mind.) Could this mean the scrapping of certain projects? (Goodbye Challenger?) Could it mean some serious cutbacks in employee benefits?
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