Saving a Private Equity Chrysler

chrysler.jpg

The Chrysler 300.

Source: theothegrey

It's private equity to the rescue in Detroit... at least that's what Chrysler and Cerberus Capital Management hope. The details of the sale are mostly dollars and cents, but it's what happens after the ink is dry that will keep people up at night. Cerberus (as "capital management" suggests) is known for managing money, not cars. And, Chrysler has a history of tough negotiations with unions, workers, dealers, even customers. Private equity has transformed all sorts of companies, can it do the same for one of the Big Three?

 

Comments (Send a comment)

I think Daimler did a good job of making cars that were different and people wanted to buy.

Sent by Jay | 2:10 PM ET | 05-15-2007

I bought a new Winnebago RV based on a Dodge Sprinter frame and power train in April 2006. The vehicle has been in the shop for transmission and turbo repairs 5 times (over 25 days in the shop). Chrysler has fought any attempt I've made to get restitution for what is obviously a lemon. The company has had a bad reputation for service, and their customer service is equal to that.

Sent by Martin Kast | 2:28 PM ET | 05-15-2007

You requested comments on Chrysler we best remember. In addition to the 1940s Dodge my father owned, complete with windows that permanently fogged over from the inside, my best memory was an Imperial I bought in the late 60s from my landlord who also owned the dealership. It was yellow with a black vinyl top - a beauty with all the bells and whisles. It was a year old. After enjoying it for about a year, I found out it had been the VERY CAR that George Wallace had used while touring Ohio seeking the presidency! Immediately, I took it to another dealership and traded it in for a Mercury XR 7.

Sent by Robert Mancell | 2:35 PM ET | 05-15-2007

My hope for Chrysler are as Amory Lovin (Rocky Mountain Institute, MacArthur Genuis Award recipient) suggested, retooling the engines of cars already out on the road would create 1 million new jobs and save one million jobs....who cares about new product cycles....take this opportunity and run with it...such a move would be viewed as American innovation..if that isn't sexy and desirable and marketable I don't know what is...

Sent by Lucy McNamara | 2:40 PM ET | 05-15-2007

Chrysler (Dodge/Plymouth) did not use Muncie 4-speed transmissions--they used a New Process Transmission.

Sent by DS Alderson | 2:50 PM ET | 05-15-2007

What is the status of Jeep in the sale?

Sent by tom lowe | 2:53 PM ET | 05-15-2007

My family and I loved the design of our last vehicle the VW Weekender, except that it's a VW and never worked. We loved the seating options, the fridge, the pop-up roof, everything. We would love to see something similar, but with the Chrysler/Dodge engine, etc. Something that we know, when we jump in it, it will go.

Sent by Kristen | 2:58 PM ET | 05-15-2007

As one of your callers said, the slant-6 Valiant was probably one of the most durable cars ever built, although a bit rust prone in regions where salt is used on the roads. Chrysler's biggest problem today is that they don't market a high-mileage commuter car. When we moved further from the city and it came time to trade in our Intrepid, we had to switch to Pontiac in order to get a high mileage sedan.

Sent by Sean Melia | 3:01 PM ET | 05-15-2007

When I was 21, I bought a brand-new Plymouth Duster (in Jamaica Yellow) in 1971 for $2,814.34 and kept it for 20 years - I loved that car and cried like a baby when it finally died. We had some memorable times together... In 1991, I traded her in for a Chrysler Le Baron ($22,000+; nail polish red) and kept her until 2006, when I moved from Phoenix to Missoula, Montana. Loved her, too, and her new owner tells me she's just as spunky and pretty as ever. Oh, yes, and I cried when she drove away, too...

Sent by Meredith Sheane | 4:55 PM ET | 05-15-2007

One of your guests mentioned the GM plant in Oshawa as having the highest quality. Too bad he didn't think it would be interesting enough to note the number two plant in quality--Windsor, Ont, where the Chrysler Town & Country, Chrysler Pacifica and the Dodge Caravan are made.

Sent by Alan White | 8:57 PM ET | 05-15-2007

If the Chrysler Group hadn't lost $1.5 Billion in Q3, would any of this have happened? The group was profitable 12 out of the last 13 Q before Q3 of 06. Why is Tom LaSorda still in charge after sitting by and allowing that kind of a loss to happen? How do you lose $500 million a month for 3 months in a row and not do anything to stop it. Plants that were building gas guzzler SUV's and pick up trucks were working overtime during that time and those vehicles were going straight to storage lots because there were no buyers for them. 500,000 unsold vehicles sitting all over the country. Sales banks almost put Chrysler out of business in the late 70's but LaSorda allows it to happen all over again. Do these executives not know the history of the companies they run? Are they doomed to repeat the same mistakes over and over again? That's been the history of this company for 30 years! It's unbelievable that anyone could still be employed after overseeing (with their eyes closed) that size of a disaster.

Sent by Pat | 1:00 AM ET | 05-16-2007

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