In case you didn’t catch the business news, DaimlerChrysler accepted an offer of $7.4 Billion from Cerberus Capital Management for the Chrysler part of the business. Daimler will retain 20% of the business to be known as Chrysler Holding, but also assumes the former division’s debt. What is surprising to me is that UAW President Ron Gettlefinger supported the transaction.
Where the company goes now is going to be interesting. Chrysler is in the middle of a restructuring to return the company to profitability in a couple of years. The upside is that the company is starting out debt-free thanks to Daimler assuming the debt. The downside is where the negotiations with the UAW (and with the rest of the staff) go. No doubt concessions for health benefits and retirement coverage will be on the table.
Will Cerberus pump up the company before dumping it? Only time will tell.