Cerberus prepares for Chrysler ‘long haul’ - Dodge Nitro Forum
Chrysler/Dodge/Jeep News Find out the latest scoop here!

 
LinkBack Thread Tools Display Modes
post #1 of 1 (permalink) Old 06-19-2008, 01:39 PM Thread Starter
Super Moderator
 
rickaren's Avatar
 
Join Date: Nov 2006
Location: Indiana
Posts: 22,861
Garage
Cerberus prepares for Chrysler ‘long haul’

June 19 2008

Cerberus Capital Management, the US private equity group, is hunkering down for the long haul at Chrysler, admitting it may be a decade before it sells the struggling carmaker acquired in a $7.4bn deal that epitomised last year’s bull market.

Timothy Price, managing director of Cerberus, told the Financial Times that his group often owned companies longer than rivals before seeking an exit.

“We have a model that is buy, fix and hold,” he said. “It is not a problem for us to have a 10-year holding period.”

Shrugging off the sharp fall in car sales in the US, which triggered a 25 per cent drop in sales of its Chrysler, Dodge and Jeep brands in May compared with a year earlier, Mr Price said “everything is going better than expected”.

Chrysler was forecast to lose $1.6bn last year following a $1.4bn loss in 2006, when it was still owned by Germany’s Daimler. For many, the purchase of the marque has become the poster boy for private equity’s battle to turn round troubled companies bought during a credit boom before markets nosedived last summer.

However, Mr Price declined to say when Chrysler would stop burning through cash and return to positive cash flow.

Chrysler ended 2007 with $9bn of cash on its debt-free balance sheet, and Bob Nardelli, who took over as chief executive after his controversial departure from Home Depot, told the FT it was still “very close” to this.

Denying that Cerberus had any regrets about buying Chrysler and insisting that, given the choice, it would still do the deal, Mr Price said: “The industry is cyclical and demand does not drop 20 per cent every year in the US auto market.”

Chrysler is buying more components for its vehicles outside North America, both to bring down costs and to help establish a foothold in overseas markets where it currently has little or no presence.

In recent years, Chrysler’s international strategy has focused on expanding exports from plants in North America and, to a lesser extent, Europe.

Although sales outside North America reached a record of 21,500 vehicles in May, that was still only 12 per cent of sales in the US and Canada.


LINK:FT.com / Companies / Autos - Cerberus prepares for Chrysler ‘long haul’

Rick

Nitro Year: 2007 (1 of 91,815 sold in 07)
Nitro Model: R/T 4X4 Stone White
CAT-BACK Exhaust, CAI, Projector Head Lamps
Fully-Equipped w/all factory options
rickaren is offline  
Sponsored Links
Advertisement
 
Reply

  Dodge Nitro Forum > Dodge Nitro News & Polls > Chrysler/Dodge/Jeep News

Quick Reply
Message:
Options

Register Now



In order to be able to post messages on the Dodge Nitro Forum forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.

Password:


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:
OR

Log-in











Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page
Display Modes
Linear Mode Linear Mode



Similar Threads
Thread Thread Starter Forum Replies Last Post
Automaker a 'diamond in the rough' to buyer rickaren Chrysler/Dodge/Jeep News 0 05-20-2007 05:24 AM
Charting Chrysler's Next Move rickaren Chrysler/Dodge/Jeep News 0 05-16-2007 07:29 AM

Posting Rules  
You may not post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

 
For the best viewing experience please update your browser to Google Chrome