AFSCME 3357-HOF'S BLOG

Is Cerberus trying to Roll up Chrysler and GM?

The Detroit News reports that representatives from Cerberus Capital Management have met with high level executives of Daimler Chrysler, and are undertaking a complete review of the Chrysler division's books in preparation of making a concrete buy-out proposal. (DCX executives are also meeting with representatives of the Blackstone Group, another buyout firm.) Last year Cerberus completed the purchase of a 51% share of GMAC, and Cerberus is a leading contender to take over what is left of Delphi after bankruptcy. It looks to me that Cerberus's overall strategy could be one of opportunistic scavenging, or it could be a grand plan to take over the remains of the great American auto industry. I suspect the grand strategy will not become truly apparent until Chrysler and General Motors complete their UAW negotiations later this year. At least as far as GM is concerned, bankruptcy considerations will weigh heavily in Cerberus's business decision.