Cerberus will own 80.1 percent of the Chrysler Group
05-17-2007 | 05:08 PM
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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?
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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For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you hope and a future. Then you will call upon me and come and pray to me, and I will listen to you. You will seek me and find me when you seek me with all your heart.
05-18-2007 | 01:07 PM
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RE: Cerberus will own 80.1 percent of the Chrysler Group
I am not a true gearhead and not in the know however, I would be surprised if a manufacturer would announce that they are going to produce a vehicle and then pull it last minute. I think that if they did something like that it would make them look pretty bad. Additionally, GM has already committed to make the Camaro and with Ford making money hand over fist on the Mustang, I would be very surprised if Chrysler (now Cerberus) would not at least do a three year run on the Challenger. Hey, but what do I know I am in real estate not car manufacturing. Can anyone give an example of a car manufacturer pulling the plug on a vehicle after announcing it was going to be made?
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