Quote of the Weekend: Never Bite Off More Than Your Three Heads Can Chew Edition
“We were too optimistic on timing. Maybe what we should have done was not bought it.”
Cerberus Capital honcho Steve Feinberg in a New York Times takedown on his private equity bid to turn Chrysler around. Ya think? So where did The Old New Chrysler go wrong? Was it simply “one of the investments made at the very top of the credit bubble,” as a Harvard Business School professor puts it? Or was it that “Cerberus did not have a clue about the automotive industry,” as a former Chrysler employee claims? Or was Cerberus’s investment of $7.4 billion not enough in the first place? Probably all of the above, but whatever the correct diagnosis is, it’s lost on Feinberg. “I don’t know what we could have done differently,” he says. “From the day we bought it, we worked hard to improve it.”
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@Lorenzo: Bingo. GMAC is the funnel that refills the coffers. It was always in the plan to combine CFC and GMAC. GMAC will be a money printing operation once they flush the remaining bits of RE portfolio. The auto lending operation is already cashflow positive.