Cerberus to buy Chrylser

[Charger Aficionado]

http://news.yahoo.com/s/ap/20070513/ap_on_bi_ge/chrysler_cerberus

Monday is the announcement!  I hope this heads it in a better direction...

[Lord Warlock]

Chrysler is going to hell, or at least sitting at the gates of hell. 

Cerberus just bought my wife's company...they're taking over, run for your lives.  Personally don't care if they take the sub prime mortgage market (largest underwriter surviving right now) as long as the wife keeps her job.  I need her cash to support my toy habits. 

[Chatt69chgr]

This will be interesting.  I have read that Magna International was the one the UAW wanted to buy Chrysler because supposedly the other bidders would break up the company and sell off the parts.  Now since Chrysler is a foreign company, I assume that if this new bunch reneigs  (sp?) on the retiree health care benefits that the US Gov would not have to step in and take this over (albeit, for 25 cents on the dollar).  I just hope the Challenger is too far long in the process to stop production now.  I guess we will see.  Better get any reproduction parts you want from Mopar Performance now (or any other dealer available items for that matter).  No telling how all this will affect that business.

[Orange_Crush]

When a company named after a three-headed monster-dog (with a snake for a tail) which guards the gates of hell so that only the dead can enter and no one can leave...well...that's kinda foreboding.

[bull]

So it's bad news then? Hot damn! I wouldn't know what to do if it wasn't.

[BrianShaughnessy]

I heard it was official this morning around 6 on the news.

[41husk]

They announced here that workers at the Fenton plant were not happy with the sale.

[hutch]

CNBC thinks they will split dodge off into its own company.  If anything they  need to move operations down south and break up the unions.  Cant make cars in America up north anymore. Costs way too much to produce.

[Charger Aficionado]

Official word: http://news.yahoo.com/s/ap/20070514/ap_on_bi_ge/chrysler_cerberus

[runningman]

CNBC thinks they will split dodge off into its own company.  If anything they  need to move operations down south and break up the unions.  Cant make cars in America up north anymore. Costs way too much to produce.

Actually our wages are pretty comparable to Toyota and what not in the south.  Those companies just don't have the retiree costs to deal with.  We have already adopted alot of the Toyota manufacturing processes and I am paying 50% co-pays for office visits.  Last I heard the union wages were 5-10% of costs for Chrysler.  What they really need to do is to make good sound decisions with regard to product and inventory and stop pissing so much money away on stupid stuff.  I see it every day, we spend hours looking for parts to fix machines when the actual fix only takes minutes.  It is ridiculous, if these companies fail it is not because of the unions.  If you talk to most of the employees we are more than willing work with the company, it is a two-way street though.  I would take a pay cut if I wasn't forced to work every Saturday and they changed the way vacations were scheduled.  Won't happen though.  They may just move all the operations to Mexico where they can pay $3-$4/ hour.  The hemi's are made down there and I am sure alot more product will be working it's way down there.  It isn't that surprising that sales keep going down, with all the layoffs who is left to buy the cars?  For every employee that gets laid off they are probably losing 3-4 sales per year.  I probably give that many discount #'s out per year or so.

[Dan T]

This is truly bad news for Chrysler. If they couldn't improve their sales using some of Daimler's tech as a backdrop, nothing will save them now. Everyone out their who got out of a Toyota or Honda to purchase a 300 probably only did so because of the marketing pointing out the use of Benz technology. If they start producing more stuff in Mexico, more people will shy away, and it will be another nail in the coffin. Hopefully we can get at least one year of Challenger production before that gets axed..

[41husk]

any word on Challenger plans?

[TUFCAT]

Q&A on announcement - this is a bunch of BULLSHIT if you ask me  

May 14, 2007


1. Why is Cerberus purchasing Chrysler?

Cerberus is very pleased to partner with an icon of American industry. This partnership creates the right combination of financial support, operational expertise and industry know-how to re-establish Chrysler as a stand-alone industry leader.  Cerberus believes that patient capital and access to additional operational expertise can help Chrysler regain financial stability and return to a path of global growth and competitiveness.

Cerberus' investment will provide lasting benefits to Chrysler, its employees, dealers, suppliers, customers and other stakeholders. Cerberus has confidence in and respect for the people of Chrysler and looks forward to continuing to provide opportunities for the valued employees of Chrysler.

2. What does Chrysler have to gain?

Cerberus' investment will provide lasting benefits to Chrysler, its employees, dealers, suppliers, customers and other stakeholders.  Chrysler will gain financial support, operational expertise and industry know-how to re-establish Chrysler as a stand-alone industry leader.

3. Who is Cerberus Capital Management?

Cerberus is one of the largest private investment firms in the world, with approximately $25 billion under management in funds and accounts and more than 175,000 employees worldwide.  Currently, Cerberus has significant investments in more than 50 companies that, in aggregate, generate more than $60 billion in annual revenues worldwide, including household names such as Air Canada GMAC, as well as investments in the automotive sector and banking institutions around the world.  Cerberus is highly respected for its long-term investment horizon and focus on value creation.  It has a track record of working closely with management in long-term partnerships to help businesses realize their full potential.  Cerberus Capital Management, L.P., was founded in 1992 and is headquartered in New York with affiliate and/or advisory offices in Atlanta, Chicago, Los Angeles, London, Baarn, Frankfurt, Tokyo, Osaka and Taipei.

4. Who is Cerberus' operational management team?

Cerberus' operational management team comprises highly skilled leaders with broad experience across a range of industries and areas of expertise.  It includes industry veterans with management backgrounds at OEMs.

5. How does Cerberus work with companies in which it invests?

Cerberus has a tradition of working patiently and constructively with management teams to help them maximize the company's full potential.  Moreover, Cerberus believes that the firm succeeds when its partner companies succeed, and anticipates a strong, long-term partnership with Chrysler.

6. How much experience does Cerberus have in the automotive business?

Cerberus knows and believes in the automotive industry.  Cerberus' portfolio companies produce a wide range of products including fuel seals, automobile upholstery, acoustic equipment and dashboards.  That said, nobody knows the business better than the people who run it, and that is why Cerberus invests in businesses like Chrysler where excellent management teams are already in place.

7. Why did DaimlerChrysler choose a private equity firm to buy Chrysler?

DaimlerChrysler looked long and hard for the right partner for Chrysler in a competitive marketplace, and we are confident that Cerberus is the right strategic buyer.  Cerberus has a long-term commitment to the global growth and success of Chrysler.  As a private company, Chrysler will be better positioned to focus on its long-term plan for recovery, rather than on short-term quarterly results, as public companies do.

Chrysler has a job to do, and it has the right team, and a strong, committed partner in Cerberus.  Cerberus knows and believes in this business and is focused on improving the competitiveness and operating performance of Chrysler.

8. Is Cerberus making a long-term commitment to Chrysler?

Cerberus has a long-term investment horizon and focus on value creation.  This partnership creates the right combination of financial support, operational expertise and industry know-how to re-establish Chrysler as a stand-alone industry leader.

9. Will Cerberus remain committed to Chrysler's Recovery and Transformation Plan?

Cerberus recognizes the progress Chrysler has made and will continue to support the vision established by the Recovery and Transformation Plan.

10. When will this transaction be completed?  How long will it take?

The agreement is subject to approval by various regulators and is expected to close this summer.  The DaimlerChrysler Board of Management has approved the transaction.  We expect that all of the regulatory approvals will be granted.

11. Will the company change its name?

We will no longer be part of DaimlerChrysler, and our name will change to reflect that.  We recognize that the Chrysler brand has a strong reputation and is one of the most recognized and respected brands in the automotive industry.

12. Will Chrysler maintain all of its brands (Chrysler, Dodge, Jeep®, Mopar®)?

Yes.

13. What will be the relationship with Daimler?  Will cooperation on technology and previously announced joint ventures continue?

Chrysler's relationship with Daimler will continue and will be important to the success of our organization.  In particular, we will continue to collaborate on technologies for clean diesel engines, two-mode hybrids, fuel cells and other alternative powertrains that are especially important in this climate of rising consumer demand for more fuel-efficient vehicles.  Other ongoing joint projects with Mercedes-Benz also will continue.

14. Will the various powertrain investments being discussed by Chrysler Group still continue, including a new engine plant in Trenton, Michigan, and new axle plant in Marysville, Michigan?

Yes.  Chrysler's announcement in April of a $1.78 billion investment in various Michigan facilities will continue as planned.  Overall, the $3 billion investment in powertrain, which will lead to a more fuel-efficient lineup of vehicles, also will continue as planned.

15. With the various joint projects (aside from Daimler) that were connected to the Recovery and Transformation Plan continue, including the small car project from China's Chery and the new transmission joint venture with German supplier Getrag?

Yes.  The joint projects, including those ongoing projects with Mercedes-Benz, will continue.

16. How do we operate from a governance standpoint from the signing until the close of the transaction?

Business will continue as usual, and Chrysler will continue to work with Daimler until the close of the transaction.  After the close, Chrysler's relationship with Daimler will continue and will be important to the success of our organization.  As of today, Cerberus will be involved with all major business decisions.

17. Will the company continue to support Chrysler's local communities?

Chrysler will continue to be a good corporate citizen in the communities in which it operates.  We do not anticipate any changes in current corporate philanthropy obligations.

Management and Employees

18. Will there be changes to Chrysler's management?  Will employees maintain the same supervisors?

Tom LaSorda will be the CEO of Chrysler.  Cerberus believes in Chrysler's leadership team and is committed to working constructively with the company's management team to return Chrysler to a path for global growth and competitiveness.  Chrysler's management team will have the additional support of Cerberus' team of operational leaders with years of experience in the automotive industry and other functional and industry areas.

Management changes take place from time to time in the normal course of business and are not necessarily transaction related.  All employees should remain focused on their day-to-day job responsibilities.

[bull]

At least they're paying lip service to keeping the company intact in that article but who knows what they'll do. It'll probably get splintered somehow, but hey, it was in pieces when Chrysler bought out Dodge way back when. Maybe smaller, autonomous companies is the wave of the future.

[bordin34]

They need another Lee Iacocca.

[hemihead]

Great. Bought by a group of Bean Counters.I was kind of hoping that a group of Automotive minded people would pick them up.At least the Germans showed them how NOT to run an American company.A lot of guys I know bought other brands of new cars just because Daimler bought Mopar.Maybe they can get away from the butt ugly Eurotrash styling now.

[Neal_J]

They need another Lee Iacocca.

On the contrary, they need Bob Lutz.  Pronto.

Neal

[Lord Warlock]

I hope they move away from an entire line that looks like a bulky mercedes clone.  Before daimler, they were moving to fairly sleek looking cars, but afterwards they all looked the same.  Big, heavy looking, and although the engines were good, mileage is mediocre. 

[Big Lebowski]

  So who gets to fire VP Trevor (Mr. 4 door Charger) Creed?

[xs29j8Bullitt]

When a company named after a three-headed monster-dog (with a snake for a tail) which guards the gates of hell so that only the dead can enter and no one can leave...well...that's kinda foreboding.

Nice doggy...

[Sendero]

I was in the market for a new car last week. I looked at what was happening at Chrysler and opted to purchase a new 2007 Dodge Charger R/T with the R/T option ( a SRT8 minus the 425HP HEMI). My thinking was that if the equity group bought Chrysler then it was possible that the rear wheel drive mopar muscle was short lived and I might as well buy one for a possible collectible. If the sale did not go through - I have a killer 4 door sedan ( I have 5 kids).

So now I have a 70 Go Mango Charger R/T and a black 2007 Charger R/T as a daily commuter. I consider myself very fortunate.

[ChargerRT440]

I honestly give Chryssler maybe another year before that investment firm decides to spilt chrysler into pieces and sell it to the highest bidder. I don't want to step on any toes but I thinkwe should all pay our respects and try not to watch the oncoming train wreck.

[Ghoste]

Then again, maybe it will be the best thing that ever happens to the company.  Can't say that too any of us were happy with the Daimler version so maybe this will head them back to the path we'd like to see the company on.  This company has been bouncing on and off the ropes now since the late 70's and it isn't dead yet. 

[Shakey]

Question:

Other than a direct employee of Chrysler (I think we have a few on the site), how does the sale of Chrylser directly affect the members here?   

[chrisII]

if the three headed dog monster only lets the dead into hell, it kinda confirms our belief that chrysler is just that..however cerberus does have a track record of making flops profitable. we all know that the attempt to run chrysler as a german company did not do well, so if they arent guna piece it out , theyll turn it around. time will tell