The Juggling Entrepreneurs

It’s all over the papers.  Daimler is parting with 80.1% of Chrysler (automotive and financial arm) and it’s paying about $700 million for the splitoff to happen.

The new owners of Chrysler is an investment company called Cerberus Capital Management.  Cerberus owns Air Canada and a large part of GMAC (General Motors financial arm).

Chrysler, like other US auto firms, had an operating loss.  The hope is that the private equity firm - which will not have to answer to stockholders, will be able to make the drastic structural changes to make Chrysler profitable once more.

Source:

• NPR, “Q&A: Under the Hood of the Chrysler Deal“, Eric Werner, May 14, 2007.
• Business Week, “Daimler Gives Chrysler to Cerberus“, Gail Edmundson, May 14, 2007.
• Associated Press, “Cerberus-Chrysler, Labor Leaders to Meet“, May 15, 2007.
• NY Times, “In Deal, a Test for the U.A.W,” Micheline Maynard, May 15, 2007