Cerberus on ChryCo: "Our Objective is to Make Money Here on a 10-year Investment"

by Robert Farago

August 20th, 2008 7:44 PM

cerberus on chryco our objective is to make money here on a 10 year investment

Quick question: is there anyone who believes Cerberus managing partner Timothy F. Price's assertion [to The New York Times] that the private equity firm views Chrysler as a long-term play? Even ChryCo CEO Robert Nardelli is not brazen enough to make that sort of statement, preferring to go with "Yeah. What he said." Or, more literally, "Our job here is to run this company. Cerberus down the road will decide what strategic alternatives they intend to pursue.” Reporter Bill Vlasic can't come right out and say Chrysler's full of it; he plays one of those NYT nudge-nudge, hint-hint, these guys may be well and truly fucked games. "With limited access to financial data, analysts are skeptical of its overall health." Nothing like digging for a story, eh? Or sipping the Kool-Aid: "Now, Chrysler’s new leaders are settling in for what appears to be the long haul." Or, as we say in these parts, not.

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4 of 14 comments

Mud on Aug 21, 2008

Perfect pic for playing "Guess the Caption" !

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INeon on Aug 21, 2008

There are absolutely none of you who think this could turn Chrysler public again?

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Pch101 on Aug 21, 2008
There are absolutely none of you who think this could turn Chrysler public again? A lot can happen, but it's likely that it would make more sense for Cerberus to sell it to one of these partners than to take it public. A partner would pay a premium for it, because they have something to lose by not winning the bid. All that assumes that the partnering efforts work out, and that's something that I would not assume too casually. It's a gamble, but Cerberus paid little enough for it that it's at least theoretically worth the risk. If successful, Cerberus will sell it for many times more than they paid for it. The partner will likely be a foreign company, so you will ultimately end up with the Big 2 when all is said and done.

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INeon on Aug 21, 2008

Pch-- I think you're underestimating the feelgood vibe Cerberus could engender in the American public if they restored a storied American brand and guarded it against being purchased by off-shore investors. Turning an American brand into a low-end, foreign-product clearinghouse label(akin to what happened to RCA,Magnavox, Zenith, even the 'Marts'-- but those are macrolabels) might bring some consumer backlash. I think the potential for such tremendous negative press("we fix American companies, and sell them to wealthy foreigners for a profit" is not a mission statement many American car people will find palatable) will keep Cerberus from fumbling with Chrysler. I will continue to believe that Chrysler is best when she's down, and that there are quite a few surprises coming that will help her retain her title as the Jean Grey of America's automobile manufacturers.

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