Chrysler Outlines its Cerberus Future

17 May 2007

DETROIT: US automaker Chrysler Group is attempting to reassure workers and unions that their future is safe in the hands of private equity firm Cerberus Capital Management, which earlier this week agreed to acquire over 80% of the business from German parent DaimlerChrysler for $7.4 billion (€5.4bn; £3.7bn).

The trio of marques produced by the company - Jeep, Dodge and Chrysler - will be retained, pledged ceo Tom La Sorda (pictured above) and "will not be broken up under any circumstances".

In addition, says La Sorda, Cereberus is planning to invest "a lot of money", time and patience to restore the business to profitability. The company will continue to benefit from technology developments at Daimler which is to retain a 19.9% stake, although dropping Chrysler from its corporate designation.

Executives from the carmaker, together with Cerberus ceo Stephen Feinberg, also met Canadian Auto Workers union boss Buzz Hargrove who had opposed the sale amid fears about job security.

But he too appears to have been appeased by Chrysler's commitment not to cut jobs among his union and to carry through new projects already earmarked for two assembly plants in Canada.

He was also impressed by Feinberg's knowledge of the automotive industry: "They have certainly done their homework."

Data sourced from Washington Post Online; additional information by WARC staff