Say what you want, but the company will not be "dismantled". The only thing that could be sold seperately is Jeep, and I doubt that will happen, given that Jeep is part of the package. However, if that happpens, thats all of the dismantling that will happen. Cerberus didn't dump huge amounts of money into the company to sell it off in pieces. Second, NO automaker is without at least two branches, unless they are totally upscale. Logistically, "parting it out" would be a nightmare, and would likely cost more than it was worth.

I think that the idiot pundits and automotive journalists have speculated far into a corner on this. Cerberus will look to turn a profit in 3-5 years. By this, I mean that Chrysler LLC will have earned enough money to cover all of the purchase costs incurred by Cerberus, plus cover its own costs and all debts, while making a modest profit.

Cerberus will then start looking at the market to see whats out there. If a company wants to buy Chrysler at a price that Cerberus is intereted in, they might sell it. I think that its far more likely that Chrysler will be put back on the stock market and offered for public sale. This would bring far more than simply selling to another owner.

 

I know..and it's not good.

I was replying to the poster who noted that "all european companies do this"...they don't.

 

Cerberus didn't pump money onto Chrysler...sure, they bought it for $7.4-odd billion...but Chrysler has $8 billion in cash on hand, and they got Daimler to assume massive debt. Guess who "owns" all that cash - that's right: Cerberus

A likely scenario that you'll agree with:
Sell Jeep separately
Merge remainder of company with a third party like Nissan or...a few suitors are out there.

By dismantle, I don't mean selling the company as scrap. Rather, it's selling off core business units as separate entities...often, the sum of the parts s greater than the whole. And the dismantling of non-essential business units has already begun. One design center closed. Several models killed. Looking for a suitor...

 

Well, it is and it isn't. Reality is, what is the rest of the company doing if production is shut down? I'd bet that the maintenance guys are still on for those two weeks.

 

Cerberus pumped a boatload of cash into the financial division of Chrysler. $1b according to most reports. Out of the remaining $6.4b, $5b went directly into Chrysler operations. $1.4b went to Daimler, who figured to lose $1.6b on Chrysler before the deal closed. Chrysler did not have a huge reserve fund, having had most of it dumped into the Mercedes "division" to save their backsides. As it stands, Ceberus doesn't have a huge cash reserve with Chrysler LLC painted on it.

Again, I doubt Cerberus will sell a portion of the company as it now stands. I also doubt any sale will occur for another 3-5 years.

There are no automakers presently in position to buy Chrysler LLC or any of its parts. That is why I feel a public offering will be the most likely way that Cerberus will divest itself of Chrysler. I have seen no reports of Cerberus looking for a "suitor", and I doubt that 19.9% shareholder Daimler would go for that unless the terms left them with a pure profit.

The "dismantling" as you call it, is merely the widespread "corporate downsizing", which is fairly logical in times like these.

 

Yeah ol Nardelli didn't do Home Depot any favors and I was disappointed to hear they were hiring him. On the positive side they did hire Jim Press from Toyota.
I would hate for Chrysler to be bought by some company in India like 'Tata' or communist china inc. Poor Jaguar.
I hope they Chrysler survives. I have a Jeep (TJ) wrangler too.

 

I wouldn't be too quick to dismiss Chrysler just yet. There is always one thing missing that the press never ever talks about. After all of the R.I.P. disinformation that the press and everyone else has spread about Chrysler, they still have managed to keep most of their market share intact after all these years. Can Ford and GM say that? No they can't.. not even close. They are putting together a sound plan to make money and get rid of the overlap and dead weight on all fronts, the only thing not cooperating is the US economy and that is not their fault. Others only wish they would sell Jeep, and others only wish they could just put a Cummins in their pickups! It just ain't fair. HA!

 

Some clips from Automotive News, a large auto trade pub:

That $1B that Cerberus pumped into Chysler was actually $2B, but wasn't even their money:

Almost all of the cash paid by Cerberus for Chrysler went to Chrysler Holding LLC, the new name of the company... very little went to Daimler, less than 10%. Much of the cash paid by Cerberus went right back into their pockets:

$8B is not much money in automotive terms, not when you consider that Ford and GM have over $30B each in cash...and Toyota has so much cash they could use a small portion of it to buy out all 3 domestics.

Private equity can be good: Look at Harley-Davidson and Ducati as great examples. All I'm saying is that Cerberus isn't the shining knight that's come to rescue Chrysler...they've put very little of their own money on the line during this restructuring.

I sincerely hope that the company emerges stronger than ever. They've got a few key people in place, like Jim Press...but even he has admitted that the lack of future products are worrysome, and much worse than he had anticipated.

 

Right, but that is not the money that Daimler Chrysler walked in with, that is a progress report. If its a correct assesment, it seems to me a bit early to write off Chrysler.



Again, thats correct. But "align" and "Merge" or "Buy" are far different things. There has been public talk of Dodge feeding Nissan a fullsize truck, while Nissan builds the Dakota.



Again, thats a cooperative deal, not a buyout.


Again, that may be true, but the numbers I posted were from the deal, not anything done at a later time. Given what Daimler sucked out of Chrysler, they should have handled all $2billion of it.


No disagreement there, but "in their pockets" still means "on Chrysler LLC's books."


I believe we're relisting what I already said.


I'd love to see where those figures came from, given that GM and Ford were in "junk" status on Wall Street two years before Daimler sold Chrysler.


According to the numbers released at the time of the deal, Cerberus had committed almost half of their worth to buying and improving Chrysler. I still say Cerberus will not sell any or all of Chrysler without making a large amount of prifit.

Given that the market has changed radically in two years, I doubt anyone had a good lineup except Toyota.

 

What I find amusing...sort of...is that Daimler Chrysler effectively PAID Cerberus $650 to take Chrysler. (Because all of Cerberus' money went into Chrysler LLC).

Make no mistake, whatever Cerberus plans on doing with Chrysler, they'll make big money on it.

 

That part is hugely amusing. Of course, the not so amusing backside of that is the removal of the $38billion in reserves that Chrysler had prior to Daimler buying them.