Anyone else pickup this story about Cerberus?

[Ghoste]

I saw this on another forum but I have no idea as to how accurate it is.

Cerberus has stated that it will give up ALL of its equity in Chrysler, saying it is doing so to help the company to survive. Cerberus is retaining Chrysler Financial, in the past a major moneymaker, which should benefit from Chrysler's future good fortunes. (Chrysler Financial, like GMAC, used to generate enough profits to offset losses on building cars.)

Full story with link to the Automotive News story which is our source: http://www.allpar.com/news/index.php/2008/12/cerberus-chrysler-to-be-exchanged/

[Mike DC]

Well, Cerberus has never wanted anything out of Chrysler except their financial branch.  That much is very clear.

   

[Mopar2Ya]

Yes, this plucked from modernmuscleforum.com :

According to a new Automotive News article, Cerberus is planning to give away its entire stake in Chrysler - roughly 80% of the company - to labor and creditors.

Bush's loans require Chrysler to provide half of its obligation to the UAW Employee Beneficiary Association trust with equity. In addition, Cerberus has said it would exchange UAW agreement with severe pay and benefits reductions for equity. Cerberus is also offering equity to creditors in return for lowering of debt.

As a result, Chrysler would be entirely owned by labor, creditors, and Daimler. It appears that the UAW (including the health-care fund) would have the most equity. The move leaves Cerberus with Chrysler Financial, which is likely to be a strong profit-maker when the economy turns around; the private equity firm has already agreed to invest the next $2 billion in Chrysler Financial profits in Chrysler, LLC.

Cerberus also noted that it had not invested more in Chrysler because its charter limits how much it can invest in any one organization.

The move should put aside rumors of merging with General Motors and being purchased by a Chinese company.
Reply With Quote

[Ghoste]

If the story pans out and Chrysler goes under after this, the UAW won't be in much position to finger point.

[Mopar2Ya]

I hope it works. Neither Dailmer nor Cerberus had Chrysler's best interest in mind during their rein. Time will tell if the nest exec's do.   

[jerry]

good news for uaw