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Cerberus/Chrysler Deal a Snow Job?
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In "Chrysler at the Gates of Hell," on the Huffington Post blog, Automobile Magazine’s Jamie Kitman ventures to say that after Cerberus Capital LLC, the owners of the newly named Chrysler Holdings LLC, is through with Chrysler and the UAW, publicly traded companies — often maligned for having short-term returns in sight with long-term strategies left to suffer — will look benevolent in comparison. He also speculates that more predatory loan practices are just around the corner as Cerberus, which bought GMAC last year, now also has access to Chrysler Financial.
But more importantly, one tidbit that Kitman mentions, which has been a sin of omission for many news outlets in recent weeks, is that three ex-politicos, each fallen from grace in the political realm, are involved with Cerberus, with formerly much-ridiculed Vice President Dan Quayle helping steer the well-stocked ship. Quayle is Chairman of Cerberus’ Advisory Board, and has been heavily involved with the investment firm since 2000. Additionally, former Treasury Secretary John Snow and former Defense Secretary Donald Rumsfeld are also involved in Cerberus.
In recent years the once much-ridiculed VP has served as the door-opener for Cerberus, helping to get the group into new markets that would be otherwise difficult and buying them direct access to high-ranking execs. In fact, Quayle helped the private firm establish an office in Germany in 2003 (in of all places Frankfurt), according to information in the former VP’s official bio.
Kitman remarks, “The man who forgot how to spell potato is chairman of Cerberus' global investments unit. Can you imagine corporate officers accountable to shareholders choosing him for an important job?”
UAW president Ron Gettelfinger has been widely criticized in recent weeks for accepting (and endorsing) the purchase of Chrysler by Cerberus before even meeting with the group. Cerberus had provided a written statement saying that there were no plans for additional job cuts directly connected to the sale, but in recent weeks there has been widespread speculation that the group is contemplating how to streamline, or possibly outsource, a significant portion of Chrysler’s production.—Bengt Halvorson
Chrysler At The Gates Of Hell—HuffingtonPost.com
Responses (16 total)
By Brian B. | Posted: May 31st 2007, 03:56:01 PM
I was trying to be nice in my piece and not mention any comparisons to Ms. Rosie. But, since it's out of the bag.. Well said, everyone.
Brian
By Steve Haynes | Posted: May 31st 2007, 02:31:43 PM
The first clue that the article was a political hatchet job should have been that it was in the Huffington Post. You can't get much more anti-American than that unless of course if Rosie O'Donnell had said it.
By Trinton | Posted: May 31st 2007, 01:56:07 PM
What exactly is the reason for this blistering attack. I don't recall what it was that former Vice President Dan Quayle did which called in to question his business abilities. My recollection is nothing. To the contrary I believe Mr. Quayle's business record is very good.
What I really think this is about, is that the author of this opinion piece does not like the idea that the under worked and overly compensated UAW workers will either have start earning their keep or they will lose their jobs.
I hope that Cerberus will realign the cost of Chrysler with realities of the market place so that it can succeed. In other words a production worker with limited skills can not expect to earn excessive wages doing a factory job (i.e. Union wages) and then go shop at WalMart (China, Inc.)
By Fresh Auto Reviews.News,Movies and Pics. » W | Posted: May 31st 2007, 09:58:32 AM
[...] for $75.00 in 1952, similar to the one seen here. Thanks to the Car Connection for this story. [photo credit: www.autogallery.org] [...]
By Everett Rupert | Posted: May 31st 2007, 07:57:39 AM
The fact that several executives that have recenrly had less that stellar job and other performances should not deter the success of the New Crhysler. Really, the pundits can't have it both ways. I remember when the "merger" hapened in 1998 how media sources and others trumpeted the agreement as beneficial to both parties of equals, how Chrysler would benefit from a seamles integration into the DB culture and gain access to Mercedes' vast engineering complex for product development, forgetting that the "merger" was not hailed by much of the DB board of directors.
One thing that caused the merger to be fumbled is that many of the Chrysler executives took their earnings and headed for the hills with the merger announcements. Also, as I thought, Mercedes would have been far better off merging with a more upmarket company, one with which there could be some product and price synergies; the Chrysler deal offered neither of those.
More recently, the pundits have talked of Chrysler's being sold to GM, Renault, The Man in the Moon, etc. Sorry, guys, but you don't get to choose Chrysler's new owners; indeed, I for one am looking forward to the possibilities of a reinvented
Chrysler.
By Brian B. | Posted: May 31st 2007, 03:19:01 AM
While I generally enjoy reading the TCC blogs, every now and again the political leanings of the writers show as in the above article. Despite what the writer feels may be the ignorance of the corporate officers in choosing these fallen-from-grace "ex-politicos" (as in attempting to insinuate a prerogative connotation to that term) are very intelligent men.
We should all be bothered by people who denigrate others simply because these others do not believe the same things these people do. An honest difference of opinion is nothing to be squelched. I pray the writer is never maligned for a simple--yet public mistake as Mr. Quayle was for the infamous "potatoe incident".
As far as Cerberus goes, they must be doing something right in order to become as prominent as they are in the financial world. But, then again, how much talent and skill does it really take to further bludgeon the downtrodden and take their wealth and line one's own pockets.
The Chrysler marque is once again in the hands of domestic ownership. That is important. I would be willing to guarantee that there will be many decisions that will be made that will earn Cerberus the ridicule of the elite. I'm certain that we have not heard the last "potatoe" joke or slam against big business in this case yet.
So many people always seem to have a much better idea or methodology for these situations than the people that actually pull it off. My question to them is "Where were you folks (and your money) in the Chrysler bidding process?
The auto industry must evolve far beyond the idea of providing cradle-to-grave insurance and other benefits in lieu of additional wages as they did 40 years ago. All they did was create a monster that forced DCX to practically pay Cerberus to take Chrysler off their hands. And the unions must get beyond the "stick it to them before they stick it to us" attitude. The well will run dry at some point, my friends.
It is my hope that Chrysler Holdings LLC will succeed wildly past the expectations of their critics. I hope they can do it without layoffs or further outsourcing. I hope the unions don't negotiate themselves right out of their existing jobs. I also hope that Cerberus won't squeeze any more out of the working folks (notice I didn't say unions) than is absolutely necessary in order to become competitive once again.
Let us celebrate the fact that the iconic Big Three American automakers are once again owned by American business people.
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