Famous for being a failed savior, a financial hound of Hades has come to the aid of Gawker Media and its many online publications.
Cerberus Capital Management L.P., the infamous private equity firm that produced headline gold — and not much else — after its ill-fated 2007 purchase of Chrysler, is now offering cash to another bankrupt company. The firm announced it will hand Gawker $22 million to keep the lights on while the media giant completes its bankruptcy proceedings and sell-off. (Read More…)
Billionaire investor Kirk Kerkorian died Tuesday at the age of 98, leaving behind a legacy which included the automotive industry in his twilight years.
My 25-plus years as a Big Time Auto Industry Executive afforded me many memorable moments. It would be difficult to single out one example, but I may be the only person on earth who has shaken hands with both Soichiro Honda and Derek Kreindler.
As for the low point of my career, there is no contest: the morning of May 7, 1998, four months after I joined Mercedes-Benz Credit Corporation. That was the day it was announced Daimler-Benz had merged with the Chrysler Corporation.
A long time ago, I was told a little phrase which stuck with me: “Sometimes, you may be done with history, but history isn’t done with you.” It made a lot of sense to me. Just because you’ve finished with something doesn’t mean it’s over for the other party. Seems like Daimler and Cerberus are learning this the hard way. (Read More…)
So it’s the dealers’ fault if Chrysler goes down in flames. Nothing to do with Daimler, who gutted the company like a fish. Or Cerberus, who wanted to gut the company like a fish, but found itself without a fish to gut. Or the company’s current management, who have lied, stonewalled, mislead, cut backroom deals with our elected representatives and generally manipulated honest, taxpaying Americans into supporting their stupid selfish schemes. As Chrysler’s backers, as their only means of survival, let’s think about this. ChryCo dealers are sitting on a 151-day supply of new vehicles (provided new car sales have stabilized). Even if Chrysler dealers didn’t order another car, truck or minivan, they’d have five months’ supply. There’s only one reason for them to take any more vehicles: to help justify the company’s desire to milk/bilk/fleece/con Uncle Sam for more “loans.” And still Cerberus point blank refuses to reveal to us, their supposed paymasters, who owns the company. No matter what you think of a ChryCo Chapter 7 or 11 or car dealers, this is an unseemly, disgusting clusterfuck. Look what they done to my Chrysler, ma.
An increasing number of media reports are indicating that instead of a single “car czar,” Obama will appoint a team to oversee the auto industry turnaround effort. Current reports indicate that Democrat fundraiser Steve Rattner will likely take the top oversight position, but his total lack of (non-political) qualifications for the job is considered an issue. Which is where Stephen Girsky comes in. “They clearly need an adviser who knows the industry,” former Chrysler president Thomas Stallkamp tells Bloomberg. “Girsky certainly knows the industry, and he was close to both GM and the union.” And though I have questioned whether Girsky’s UAW affiliations are best described in the past or present tense, this 2004 presentation (PDF) to Original Equipment Suppliers Association is decidedly prescient. Especially for 2004. And this December 2008 presentation to UAW Local 14 seems to indicate that his recent advising stint with the UAW was a mission of truth and reconciliation rather than one of conniving and obfuscation.
Holy lack of internal controls Batman! Automotive News [sub] reports the “now it can be told” story behind the story of a Minnesota mega-dealer’s collapse. Chrysler pulled the plug on Denny Hecker last fall, forcing Hecker to close six of his 16 dealerships and sell three others. Turns out Chrysler Financial lent the “flamboyant 56-year-old entrepreneur” $550 million. And get this: $50m of that went to Hecker personally. The information surfaced after Hecker sued Chrysler Financial for canceling his dealerships’ credit lines “without warning.” Chrysler countersued, revealing that it loved them some Hecker. Post-Cerberus, ChryCo threw money at—I mean, “invested”—in Hecker’s dealerships, a rental car agency (since bankrupt), real estate and “investment firms.” Ford was behind the curve on this one; they’ve sued Hecker for a relatively paltry $3.1m for missing vehicle and parts payments. As the Detroit-shaped crater grows larger, look for more “revelations” from American automakers’ go-go past. Others may have done the same thing, but they won’t be facing the same volume or genre of music if/when their dealers end up in bankruptcy court. Meanwhile, Denny better hope his tagline doesn’t apply to his forthcoming court battles: “Nobody walks!”