Cerberus warns investors that future may not be rosy for Chrysler
The Detroit News reported today that Cerberus sent a letter to investors telling them that things may not go well for their recently-acquired automaker, Chrysler.
According to the letter, Chrysler can handle an "ordinary recession," but a "potent recession" or "meltdown in the automotive market" could pose a risk to the automaker's future. Still, the goals for the automaker are apparently pretty modest: The article quotes the letter as saying "We believe we bought (Chrysler) very cheaply... We do not need to transition the car industry or even to return Chrysler to a much stronger relative position in the U.S. car market in order to be successful."
Bet that'll make Chrysler employees feel good, eh?
Personally, I've been underwhelmed by Chrysler vehicles designed during the Daimler-Chrysler era, vehicles like the Dodge Caliber SRT-4, Chrysler Sebring convertible and Chrysler Sebring sedan (even if I was the only journalist who liked the latter's interior). I had high hopes that under domestic stewardship, Chrysler could return to the strong products it introduced in the early to mid 90s.
When Cerberus first bought Chrysler, there was some speculation that they would declare the operation unprofitable and liquidate it. I'm hoping that Cerberus isn't laying the groundwork for just such a move. ("Well, guys, we gave it our best shot...") To me, Chrysler is more than an investment -- it's one of the great American automakers and for a long time was known as the technical innovator of the Big Four. I'm glad Cerberus is at least cautiously optimistic -- I just wish their goals weren't quite so modest. -- Aaron Gold
Full story: Cerberus lays bare "risks" of Chrysler from Detroit News
Chrysler sucks in my opinion. I’ve driven a couple of their cars — very poor feel to them. Their body design is horrendous. If they went under I wouldn’t miss a thing.
I’m a bit suspicious of Cerberus’ motives in this whole venture with Chryco, especially since they have such a deep connection with GM/GMAC. As I see it, Cryco’s biggest asset or “plum” is the Jeep Division. Jeep would definitely add pizzazz to GM’s sagging Truck Division or Hummer sales. I fear that Cerberus may sell off Jeep to GM and allow the rest of Cryco to freefall into oblivion during this recession… finally throwing up its hands and letting it go into chapter 7. This would be viewed in automotive history as sacrificing one icon(Chrysler) for the sake of saving another(Jeep). Also, note well that their hottest prospect for the future, the Demon is set for manufacture in China, by Chery Motors, rather than by a regular Chryco plant! Hey these are only my thoughts, but I’m certainly not going to buy a Chrysler anytime soon.
Not a fan of Chrysler. However, I’m hopeful that their plan to eliminate/consolidate models will help. They also need to add a bit more style, better driveability and quality in to their portfolio. Otherwise, their days are probably numbered. There is too much competition these days.
Unfortunately, there is NO ONE model in their lineup that is appealing to me. The new Challenger SRT8 is not available with a munual. The Viper is bested by the Vette for less $’s. The minivans (even the new ones) are not as nice as the Honda, Toyota…The Charger is just plain UGLY. The Sebring looks better but it’s so low quality I would not even rent one…
Anyway, good luck Chrysler…Ford appears to be in trouble as well…GM appears to be on the right track…
Cerberus did not buy Chrysler to rescue it from oblivion. Capital venturists buy companies for one reason only: to make money. I wouldn’t be surprised if Chrysler was broken up and sold piecemeal. It took decades for the Japanese and Koreans to establish themselves. Knowing this, the Chinese (and Indians) would be very eager, and willing to pay a premium, to adopt these iconic brands to jump-start their invasion of the US market. Just watch.
Although I am not a fan of ANY car after about 1970, I will miss Chrysler if it dies. I’ve had several Plymouths and Dodges throughout the years and they were very nice, reliable autos.
P.S. Wish I had my Roadrunner back!!!