Can Cerberus still save Chrysler and GMAC Financing?
Cerberus Capital, run by Stephen Feinberg, is staring at the abyss right now regarding Chrysler and GMAC Financing. The New York Times characterizes the fund as “racing to salvage” its investments in the face of a severe downturn in the auto and home-lending industries. Until recently, the story was more upbeat: big name financier rides to the rescue of some big-name American brands. People thought Feinberg would turn both around and restore the luster. But the economy and credit markets–quite a one-two punch–simply have not cooperated. The turnaround of both are still far in the future. An indication of the environment: GMAC and its Residential Capital home loan subsidiary have announced that they will dismiss 5,000 employees (60 percent of Residential’s staff) and close all 200 of its retail branches.
