Reports say Cerberus chosen as Chrysler buyer
The WSJ says the deal would set up an entirely new company to take responsibility of Chrysler's massive pension and health care liabilities. The paper also says Cerberus would also make a "substantial payment" to Daimler. WSJ also says former Chrysler chief operating officer and Cerberus adviser Wolfgang Bernhard would not return to Chrysler in an executive position, but could have a board seat. Also, Daimler may keep a minority stake in Chrysler.
Whether or not Chrysler going to a private equity firm is a good thing makes for seriously interesting discussion fodder. Automotive News (subscription required) points out that breaking Chrysler free of its health care and pension baggage could make for a much more lithe car company capable of achieving great things. But the UAW is already upset with Cerberus possibly pulling out of a deal to help Delphi out of bankruptcy. Which means the union workers are not exactly gonna be celebrating a Cerberus buy.
Bloomberg's story has David Cole, chairman of the Center for Automotive Research, saying a private equity buyer would be "the worst nightmare" for the UAW.
So, what do AB readers think? Can cost cutters cure Chrysler? Or might management by Magna have mattered more? Tune in tomorrow for the next exciting installment.
[Sources: Automotive News, The Detroit News, The Wall Street Journal, Bloomberg, Reuters]
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