SOLD!!

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.

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About Tom Roland

EE for 25 Years, Two Patents - now a certified PMP. Married twice, burned once. One son with Asperger's Syndrome. Two cats. Conservative leaning to the Right. NRA Life Member.
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One Response to SOLD!!

  1. Tom says:

    Cerberus didn’t do well with Delphi, and the name itself means ‘hound of hell’ from greek mythology. It appears US labor costs are inflated by healthcare/pension. It is most odd that in low labor Japan, the state provides healthcare, benefitting their auto manufacturers.
    A number of large US corporations therefore are re-examining how the cost of healthcare should be distributed. Until that problem is successfully addressed, our mfg is at a disadvantage in global economics. In the short term, my guess is that Cerberus will be able to down-negotiate UAW, with the US
    Toyota/Nissan plants as examples.
    BB-Idaho | 05.15.07 – 2:07 pm | #

    I gave up on Chryslers a few years ago. Too much maintenance.
    Always On Watch | Homepage | 05.19.07 – 7:57 am | #

    BB – The negotiations this Fall will determine if the US auto industry is going to make it or not.

    AOW – I’m sorry to hear that! I will say that Chrysler has made big strides in the quality of their product (I should know – they hired me!!)
    Tom | Homepage | 05.25.07 – 7:10 pm | #

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