Rare info on Chrylser bidder Cerberus reveals a "fierce reputation"
Cerberus was the mythological 3-headed dog that guarded the gates of Hades. Cerberus Capital Management is the very real private equity firm -- one of the bidders in play for the Chrysler Group -- that guards the privacy of its dealings almost as jealously. USA Today takes a look at the firm and reveals a company with a "fierce reputation" and "a combative, take-no-prisoners style."The list of companies that are either owned by Cerberus or which the company has majority stakes include: Alamo and National rental car, Fila, Blue Bird yellow buses, Rafaella clothing, GMAC, auto suppliers CTA Acoustics and GDX Automotive, banks, mortgage companies, and property managers. It has also made a multi-billion-dollar investment bid for Delphi, and bankrupt supplier Tower Automotive is looking at selling its assets to Cerberus for $1 billion.
If it bought Chrylser, Cerberus would instantly double its annual revenue, but revenue isn't the prime concern for private equity firms -- return on investment is. The issue is that no one knows how Cerberus would go about increasing return from Chrysler. The team of auto insiders working with Cerberus include a couple of powerful former Ford execs, and former Chrysler COO and VW exec Wolfgang Bernhard. Yet the article also states that the UAW and the Canadian Auto Workers have publicly opposed the sale of Chrysler "to Cerberus or any other private equity group," even though Cerberus is "known for its lengthy roster of highly successful turnaround and industry managers."
[Source: USA Today]
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Reader Comments (Page 1 of 1)
geo.stewart 10:09AM (4/16/2007)
well of course the unions are against the private equity firms. they dont have the mindset that the unions are necessary evils. they wont put up with the shenanigans. if the unions wont play, they'll either offshore it or shut it down.
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Tool 10:37AM (4/16/2007)
I think the Cerberus bid represents the best hope for turning around Chrysler. There, I said it.
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UpIrons 10:54AM (4/16/2007)
Completely agree with #1 and #2. The union can fight all they want but this is a life support option for Chrysler. An investment firm is not going to pour money into any investment for very long if it doesn't like what it sees early on. The union will have to work with them from the start or they'll be done for either way. I would rather see Chrysler survive, albeit union-less, versus being totally wiped out.
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nighthawk_cp 11:48AM (4/16/2007)
They are about to get paid off by the Taylors on Alamo and National stock. The company is being bought out by Enterprise Rent-A-Car, to help get them a better position in the airport rental car market.
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ssgtakeo 5:25PM (4/16/2007)
I think a good way to deal with this is to toss the unions on their butts and offer the employees directly shares in the company, I think that would probably be the most fair for everyone.
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iQuack 12:26PM (4/16/2007)
Twenty years ago, the UAW held a gun to the heads of GM, Ford, and Chrysler managers and used strike threats to acquire untenable benefits that now require their products to be either overpriced or under-engineered.
The UAW must be broken to save the domestic car makers.
Good for Cerberus if it buys Chrysler and breaks the UAW ASAP.
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V. Greene 1:04PM (4/16/2007)
Yeah, blame the unions. It's the union's fault. It's not the Sebring's fault, or the K-Car's fault, or the generally horrible product Detroit's put out for, oh, about 30 years now. And America's declien as an auto maker has nothing to do with the emergence of Japan over that timeframe, no, it's the big bad unions.
Get over it. The auto industry (thanks to the union) is one of the few that still has to treat employees well and that is a good thing for everyone except the rich people at the top. And who cares about them? I sure don't.
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G 2:21PM (4/16/2007)
#6's attitude is the exact reason that american automaker's are in the toilet. The sense of entitlement that expects concessions and great treatment even when the parent company is faltering. The 'not our fault, pay us anyway' attitude will spell the demise of the US auto industry if its not changed.
The quote "The auto industry (thanks to the union) is one of the few that still has to treat employees well and that is a good thing for everyone except the rich people at the top. And who cares about them? I sure don't." is clueless. Its good UNTIL THE COMPANY GOES BANKRUPT and EVERYONE is out of a job including the 'rich people at the top' that you dont care about. The near-sightedness is seriously unbelievable.
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geo.stewart 2:41PM (4/16/2007)
I have no misconceptions that hte union is totally to blame. I can look at several model failures, but since the K-car saved Chrylser, I cant list it among the failures no matter how bad the car may be by today's standards.
But the moves by the union have put the automakers in a crunch. Ford is buying their way out of the unions. the Chrysler group will have to do a similar thing and probably kill Chrysler in the process, leaving Dodge and Jeep. Chrysler will likely die with the 300 or at best become a model name for the 300 replacement.
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Don 4:13PM (4/16/2007)
The only thing the UAW and CAW is worried about is getting bought out by an entity that could seriously curtail their ability to thoroughly ruin Chrysler further.
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iQuack 8:27PM (4/16/2007)
Yep, the unions met their enemy and it's themselves.
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alanasmom 8:49AM (5/07/2007)
Let me just say that as an employee of Cerberus I am not happy with what they do for a company. I can't give a lot of inside info, but I will tell you that our healthcare has gone to crap, we didn't get any cost of living raises this year and the money they invested in the company I work for wasn't invested wisely. I can easily see them doing the same thing for Chrysler. You may as well say goodbye to Chrysler if Cerberus gets a hold of them.
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bhwana 3:04AM (5/18/2007)
Union or Non-Union I disagree with all of you.
There are several arguments to consider. If I were to purchase a Toyota over a Chevrolet would I be getting a vehicle of better quality? Did you know that between 44 and 48% of Toyotas are 'made' in the United States? We have (speaking relatively) the same American workers producing Foreign cars but they are of better quality? Did you know that most foreign competitors have a National Healthcare system in place in their respective countries? Asian manufacturers have about $300 worth of retirement liabilities per vehicle compared with around $1600 per American car. Who are we supporting? Is it no longer fasionable to be Proud To Be American? So everyone says that it is the Unions fault. The union is crippling Chrysler. But, is it? Why not support our own? The Japanese do it.
Did you know that as a whole Asian vehicles are priced higher than American vehicles? And NO! American manufacturers are NOT PERFECT! But does anyone say ANYTHING when the CEO of Home Depot walks away with over $200 million for doing absolutely nothing? What about Home Depot's non-union employees who make around $10 an hour?
Why not fault them for Home Depot's poor performance! Oh, I forgot - there non-union.
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Fritzophile 9:23PM (5/15/2007)
Hey, guys--
must be a gathering of robber barons here or a cult of Rockefellerists--why bust the union's chops? The Germans are all in unions, and people love their cars. Japanese culture doesn't require a union--they're treated just as well without one. A reasonable person might ask why a CEO deserves his $200 mil stock options AND a golden parachute for driving a company into the ground, but apparently that attitude is heretical in your circles. Get real. If American automobile companies could offer a product that appealed to car buyers, then they wouldn't be on life support. Blaming the unions for this is like blaming the front-line troops for losing the war. It's not THEIR strategies that got them surrounded and shot to hell. Try making a policy that rewards CEOs only for improving a company's market share,or for product innovation, and then we can talk about who's to blame for what. Stop toeing the capitalist party line--think for a change.
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henrysdad 9:18PM (5/15/2007)
alanasmom - if you are an employee, I bet your boss is sure proud of you.
Unions and their out-dated way of looking at employers as the enemy of workers are due to go the way of the dino. If they served a purpose, it has been corrupted and hijacked into strongarming companies and extortion. Tony Soprano would be proud.
Chrysler has built some of the crappiest cars. I sell cars, I run from most Chrysler products. It's only been since Daimler bought them that they built a decent car. The Neon, Summit, Intrepid, Sebring, they are not well made cars. The vans and trucks are passible, but no one would miss them. Everyone else builds something like it and better.
I hope Cerberus doesn't learn the same lesson as Henry J. Kaiser.
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Steve Pierce 1:37PM (5/17/2007)
I heard a quote from one of the top UAW reps regarding the aquisition of Chrysler and it said "This isn't about supporting workers and families, this is just a bunch of people getting together trying to make money" That is very typical thinking in the UAW (which stands for U ain't workin'). Of course they are trying to make money. This is a capitalist country. People go in to business to make money, not give people jobs and provide workers with a high standard of living. In the past, I have spent nearly 2 years working in Chrysler as a subcontractor. Let me tell you first hand what I saw. I saw a bunch of drunken hillbillies whose only responsibility was to put in 6 screws on a passenger side door and- make BIG cash for doing it and- complained about how bad they have it. This is where the unions fail. When they are laid off, that they receive 95% pay for 6 months and that only goes down at a 5% incremental rate etc. from there. I own and operate a union company. I am an active member (not by choice) as well. Unions had their place at one time. This is the millenium. I would kick the tires of every Chrysler vehicle before getting in if I were you. No union EVER gave anyone a job, business owners do. My guess is Cerberus will come in and start making people put in 12 screws a day. Needless unions like the UAW are bankrupting companies. Everyone needs to make money at every level. But it should all be relative- Education, responsiblity, skills etc. Try stomaching making that big ole benefit payment to the union hall (every month) when you know that a big percentage of it is lining the pockets of people who are misappropriating it, much less incapable of handling it. If I were still heavily involved in the union, and looking at a career change, it would be in union politics. Those guys make a lot for doing very little. God bless America
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