Cerberus Cuts Exposure to ChyrCo Meltdown
The FT has some valuable perspective on Chrysler owners, Cerberus, the private equity firm that accepted multiple billions in taxpayer “loans” yet refuses to list the automaker’s backers. Hey, does owner Steven Feinberg hold any paper personally? Anyway, Mr. F is nonplussed by the fact that Chrysler is now on federally-funded life support begging for more. “We always try to hang in—but not at the expense of being commercial. As far as GMAC and Chrysler are concerned, we will hang in there as long as it takes. There is the feeling of a greater calling.” When did running a once-proud American company into the ground become a sacred ceremony? Anyway, there’s only so much spiritual elevation an investor can take. Know what I mean? No? Make the jump.
Such sentiments may be dubious comfort to investors. More reassuring is the fact the combined weighting of GMAC and Chrysler in Cerberus’s portfolio, originally 12 per cent of total assets under management, now represents only about 7 per cent. “They are less exposed than everyone thinks,” says Mark Epley, who is responsible for the relations with private equity firms at Deutsche Bank. “They are diversified. Nothing kills them.”
There’s plenty more about Feinberg’s strategy. But pistonheads will savor this.
Friends say formerly Mr Feinberg would criticise acquaintances for buying foreign cars, but he is now likely to lecture them for an hour on the subject. He has only ever driven US-made vehicles, with a preference for trucks. Immediately after buying control of Chrysler, he switched from the GM and Ford trucks he owned to a Chrysler-built Ram. He says it is the best truck he has ever owned.
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no_slushbox, Tsk, tsk, tsk. Sorry to disapoint you, but I own my house free and clear. My rental property is financed (with an ARM), but I have never been late. You can hate on Cerberus all you want, but like any hedge fun, their supposed to make money for their clients. They saw value in certain auto companies (not just Chrysler) as well as their financial arms. Would they like to get rid of Chrysler now? Sure. So would Dumbler. But to say it was part of some grand scheme from the beginning like these guys are some kind of illuminati cabal is conspiracy theory tin-foil hat stuff. I don't blame them for taking gubment money. I would too under the circumstances. I blame the gubment for offering it, with strings, but not enforcing those strings.
no_slushbox, You can take the vitriol down a notch. My only point was that making an inflammatory statment about how Feinberg cries "buy American" but drives a vehicle only made in a Mexican plant was flat out wrong. Since it seems most import car fanboys (like practically everyone on this site) out here on the net tend to believe only the negative information about the domestic automakers, please get your facts straight instead of adding to the misinformation...is that really that hard to understand? Since you seem to think a lot about acting in an honorable manner, why can't you exercise some honor yourself and simply admit you were wrong? While we don't know what model Ram Feinberg drives, the fact remains that it could be one of the U.S. made light duty models, or it may not be if it's a heavy duty model....period. You were wrong...this had nothing to do with liking or believing in Cerberus and their claims or not.
no-slushbox, I know many on this site share your belief that "Chrysler sells the worst cars of any company in this country", but have you driven the new Ram? I'm guessing not. I drove it at one of those "Ram Challenge" events and let me tell you, it blew away the competition, including the tacky Tundra with it's bizarre and ugly interior. Also, as long as you stay away from the 2.7L rental specials, the Charger and 300 are nice driving cars. Yes the interior is plain and some people feel cheap looking. My opinion is that the problem with the 300/Charger interiors lies with the choice of material grain/sheen more than anything else - they actually have a soft touch dash and door trim panels, it's just that have an odd inorganic grain pattern and sheen that makes them look cheaper than they actually are. My parents actually own a 3.5L 300 Limited with the 5-speed Mercedes automatic and they really like the car. It's been trouble free (believe it or not) and it gets amazing mileage on the highway for the size of car it is (29-30 mpg when driving the speed limit, as my folks always do). The bottom line is that there are plenty of people out there who like Chrysler products and have had good experiences with them. I believe it is a sign of an elitist mentality to deride people who like domestic automobiles by assuming they must be "less intelligent" for doing so, which is common theme I've outright read or gotten by implication in comments from readers here.