Chrysler Cerberus Divorce
The New York Times is reporting a deal struck by the Treasury Department and Cerberus Capital Management which will lead to Chrysler’s second failed marriage in three years. Cerberus (and the co-investors it convinced to come along for the wild ride) will give up their 80.1 percent stake in the company. Anyone who thought Rick Wagoner got the bum’s rush at GM can now say, Wow. Obama’s kicking out the whole freakin’ parent company. Cerberus stands to lose billions. Just how many is tough to glean at the moment. Plans to shore up GMAC and Chrysler Financial—Cerberus’ other Detroit darlings—might help them turn some kind of profit in some kind of future. The dog would like to merge the two lenders into a new hybrid financial institution. The feds aren’t all that thrilled with the idea, but who knows. The word “hybrid” usually gets their attention.
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Here's an idea (tongue in cheek) American Motors Corporation was "borged" into Chrysler in 1987. Re-establish American Motors Corporation, after a Chapter 11 of Cry-slur LLC, removing all prior ownership and debts. Remind Cerberus that an auto maker can't function without an engineering center and ask them to give the new company the Auburn Hills center, as a penalty clause / means of getting off pretty much otherwise scott-free. Provide a one time loan at very low interest rates, sufficient to carry the company for about 3 years (i.e. sink, or swim). Tell the dealerships that only 5 star dealers are now elible for the sale of Jeep and Dodge vehicles, as well as AMC vehicles (ex-Chrysler vehicles). Dump the Chrysler name; it is tarnished. AMC cars would be the lower priced line. Bring back a few interesting and memorable cars in a sort of semi-retro fashion; Gremlin sub-compact coupe, Pacer bubble car compact hatchback, Hornet compact cars, Matador based on the upcoming 200 and Ambassador, based on the ex-300 body shell. Maybe bring back the Javelin name (based on the Challenger, reskinned). Dodge would be minivans and trucks, as well as performance cars (Charger, Challenger). Jeep would be.... Jeep. Then actually build the things in North America. For the mid-sized car, dump the front wheel drive Sebring/Avenger platform and build the cars on a cut-down 300 platform, with V6's. Think outside the front wheel drive box. Just a few thoughts - outside the box.
I suppose it is too much to hope for but let's hope Jeep finally dies along with Chrysler. Jeep has killed everything it comes into contact with. The U.S. Army doesn't want them, the U.S. Border Patrol doesn't want them, we tree huggers don't want them, people who don't like sending oil money to Saudi Arabia to finance the terrorists who kill our troops don't want them, and anybody who understands aerodynamics thinks they are an old joke. Die Jeep Die.
Daimler pays $36b for Chrysler, injects capital while they bleed cash, and then sell it to Cerberus for $7b but not before putting in another $8b to cover outstanding debt and pension costs. This has to go down in the history of business as one of the worst, if not the worst, acquisitions.