Cerberus to Sell Chrysler to GM or Chinese Buyer
TTAC's Deep Throat tells us what common sense has suggested right from the start of Cerberus' involvement in Chrysler: the private equity firm has no intention of hanging onto Chrysler ten minutes longer than it takes to arrange a profitable transfer of ownership. "It’s going to take a mountain of cash to turnaround Chrysler– with no guarantees of success," DT emails. "The last thing Cerberus wants to do is pour money into the car business. Think about all the pieces in the deal… Why is Bernhard gone? Why hire Nardelli, unless Cerberus wants to marshal cash by having a strict numbers guy run the place? And don’t forget that the banks control Chrysler, not Cerberus – they’re holding $10 billion in loans." So? "Cerberus will sell Chrysler to GM in exchange for the rest of GMAC, or they’ll sell it to the Chinese who are much better capitalized than GM and can afford a 50 year view." Remember: you heard it here first.
Comments
Join the conversation
If Chery buys Chrysler, it could give a new meaning to the "Imperial" model...
China has cash to spare. Today they reported a trade surplus of $24.36B for the MONTH of June. Over $24B more cash went into China in June than came back out. That is serious money. A couple of weeks worth of China's positive cash flow is enough to buy Chrysler if they want it. Remember that in China most of the large companies are government owned, so the Chinese government basically does whatever it wants and moves big piles of money around at will.
Of course GM will buy Chrysler. And Ford. You can never have too many brands. True, they'll lose money on each car sold. But it's the volume that keeps them in business! Coming: the re-launch of Oakland, LaSalle, Edsel, DeSoto, Plymouth, Maxwell ...
The New York Times confirms one aspect of Deep Throat's thesis: that the banks are calling the tune. "Cerberus has declined comment on reports that bankers pressured the company to hire an outside executive, instead of leaving Mr. LaSorda in place. He is now number two to Mr. Nardelli."