Cerberus not divesting it's stake in chrysler

[hemiram]

According to Reuters Cerberus has no plans to sell off it's 80% in chrysler and wants to own a stake in whatever company they combine with chrysler. 

Cerberus Capital Management, which owns 80 percent of Chrysler, has no plans to divest its stake in Chrysler and aims to own an interest in any combined company that may merge with the U.S. automaker, a source familiar with Cerberus' thinking said on Monday.

Cerberus had held talks about potentially combining Chrysler with General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz), but never discussed divesting its entire Chrysler stake or swapping Chrysler in exchange for an increased stake in auto-lending business GMAC, the source said.

"Cerberus is not dumping Chrysler or simply swapping it for an increased share in GMAC. That deal was not discussed and they have no interest in it," said the source, who declined to be identified.

"In any business combination with GM or anyone else Cerberus would look to come out on the other side owning a meaningful stake in the combined auto company," the source said.

[06Hemiman]

Looks like they think that automakers are cheap right now and if they think the automaker will make a turn around it would be a good time to buy.  I just worry that whatever kind of thing they try to make will end up being a mess.

[MegaTruck]

They might be saying that they aren't going to sell off their stake in chrysler.  But they're also talking about selling off chrysler.  I read 5 times a day for the past two days that talks are still going on, that the talks have intensified, that GM would keep jeep/minivans and throw everything else away, etc.  Cerberus might get a good deal out of this, they might get a huge stake in the combined company, but chrysler as we know it would be gone.  We were lucky that it stayed together when daimler sold it off, now just a year and a half later we're going through the same thing.

A lot of people are pissed, continue to be pissed, and will be pissed at this.

[squat]

I posted this on another forum as well:

Guys,

I've been following all the news pretty closely, here's my analysis.

GMAC (51% owned by cerberus) has raised the interest for floor plans at GM dealerships to the point where the dealerships are going to other banks for credit.  GMAC has also stated that they'll only lend to customers with credit scores over 700.  GM has started an incentive program at dealerships where they give the dealership $250 for every car not financed through GMAC.

All of this points to GMAC (cerberus) putting the squeeze on GM and GM trying to fight back.  To me this looks like cerberus trying to muscle their way into GM for a bigger stake in a bigger company.  Rick Wagoner, CEO at GM so far seems pretty cool to the idea as does the rest of the GM board. 

The only positive I can get out of this analysis is that maybe it'll be Chrysler buying GM instead of GM buying chrysler but who knows.

[hemiram]

I posted this on another forum as well:

Guys,

I've been following all the news pretty closely, here's my analysis.

GMAC (51% owned by cerberus) has raised the interest for floor plans at GM dealerships to the point where the dealerships are going to other banks for credit.  GMAC has also stated that they'll only lend to customers with credit scores over 700.  GM has started an incentive program at dealerships where they give the dealership $250 for every car not financed through GMAC.

All of this points to GMAC (cerberus) putting the squeeze on GM and GM trying to fight back.  To me this looks like cerberus trying to muscle their way into GM for a bigger stake in a bigger company.  Rick Wagoner, CEO at GM so far seems pretty cool to the idea as does the rest of the GM board. 

The only positive I can get out of this analysis is that maybe it'll be Chrysler buying GM instead of GM buying chrysler but who knows.

Yeah, it seems that cerberus wants a bigger piece of the automotive pie.  It's a shame they're willing to destroy chrysler to do it...

[gman]

I posted this on another forum as well:

Guys,

I've been following all the news pretty closely, here's my analysis.

GMAC (51% owned by cerberus) has raised the interest for floor plans at GM dealerships to the point where the dealerships are going to other banks for credit.  GMAC has also stated that they'll only lend to customers with credit scores over 700.  GM has started an incentive program at dealerships where they give the dealership $250 for every car not financed through GMAC.

All of this points to GMAC (cerberus) putting the squeeze on GM and GM trying to fight back.  To me this looks like cerberus trying to muscle their way into GM for a bigger stake in a bigger company.  Rick Wagoner, CEO at GM so far seems pretty cool to the idea as does the rest of the GM board. 

The only positive I can get out of this analysis is that maybe it'll be Chrysler buying GM instead of GM buying chrysler but who knows.

That's a pretty good analysis.  I couldn't have said it better myself, and I couldn't agree more.  Cerberus is just acting like a bunch of greedy a-holes, they can't be satisfied with owning chrysler when there's the possibility of owning the largest automaker in the world.  Idiots, I hope it doesn't go down in a ball of flames but I wouldn't put any money on that.

[moparman]

I just read that they'll be looking for a 10% share or less in the combined company.  Going from 80% to <10% is a divestment to me.  I guess they bit off more than they could chew with Chrysler.

[raman noodles]

I just read that they'll be looking for a 10% share or less in the combined company.  Going from 80% to <10% is a divestment to me.  I guess they bit off more than they could chew with Chrysler.

I'd have to agree with that.  10% is nothing and it gives them a positive if the economy turns around.  Not much negative there since their stake is so small, if GM goes under what do they care. 

[speedinstyle]

I just read that they'll be looking for a 10% share or less in the combined company.  Going from 80% to <10% is a divestment to me.  I guess they bit off more than they could chew with Chrysler.

They probably want more, but they're happy to take GMAC and chrysler financial and merge the two into one big financing company.  They'll get the bailout money and have a decent amount of control over the GMopar combined screw up.  Look at what GMAC is doing right now to GMs customers and dealers.  GM is basically folding under that pressure...