Private firm's purchase raises more questions about Chrysler's future.
Posted Tuesday, May 15, 2007
OUR VIEW
The Chrysler-Daimler union is over. Now people are saying it was doomed from the start. Others are saying they always disliked one of the partners in the 9-year-old relationship.
Chrysler, if the deal goes through as expected, will be picked up by Cerberus Capital Management, a private equity firm that will not have to operate by the same rules and economic restraints that hem in auto manufacturers like Daimler.
Cerberus, for example, also owns a majority share in GMAC Financial Services. Chrysler Financial has been doing well despite the problems of the rest of the company. Is that Cerberus' real target?
Or does Cerberus plan to break apart what remains of Chrysler and so off units to other companies? That has been Cerberus' specialty until now.
So far it appears the deal will not affect Chrysler's downsizing plans, such as cutting jobs or closing the Newark plant.
But it's too early to tell what will happen. John W. Snow, Cerberus' chairman, said the deal will allow Chrysler to become a leader again. A lot of that will depend upon on how Cerberus and the United Auto Workers get along. Private equity firms are about making money, not saving jobs.
Mr. Snow also said since the company is private, Chrysler's leaders will be relieved of answering to Wall Street every quarter and thus concentrate on rebuilding. Lifting that kind of pressure could help if the plan is actually designed to go through with a revitalization move.
StoryChat Post a Comment
