Should Cerberus Partner Up on Chrysler?
Does Cerberus Capital Management need to seek a partner in order to salvage its $7.4 billion bet on Chrysler? That is the opinion of some analysts, according to Reuters. A year ago, Cerberus took Detroit by storm, snapping up an 80.1 percent stake Chrysler in a deal that the buyout firm said was intended to rescue a struggling American icon. But surging oil prices and a slump in sales have exposed the weakness of Chrysler’s position and its reliance on trucks and sport utility vehicles and the U.S. market, raising more urgent questions about the end game for the automaker under private ownership. By some measures, Chrysler faces even deeper problems than its larger rivals Ford Motor and General Motors, which have been able to use overseas earnings to cushion the blow from the downturn in U.S. sales this year. Chrysler’s U.S. sales are down 19 percent so far this year – the largest drop for any of the three major automakers. All three brands are down in closely watched quality ratings,
