Cerberus Capital Management has been building a name for itself by buying high-risk automotive assets like Chrysler and GMAC. Obviously Steve Feinberg's boys don't listen to analysts who say that Cerberus is already overexposed; the private equity fund is looking at sinking money into yet another troubled automotive enterprise. Forbe's reports that Dura Automotive, a supplier of door and seat systems and other automotive components is looking for loans to exit Chapter 11. A Dura spokesperson reveals that "Cerberus Capital Management's Ableco Finance LLC, [is] among the potential sources of Chapter 11 exit loans that are talking to the company." Dura needs a $150m first-lien term loan and an $80m second-lien loan to implement the Chapter 11 plan it filed Friday. This is Dura's second shot at exiting Chapter 11, having already failed to secure a larger loan package in December. Cerberus gave the company a $170m loan in January to defer foreclosure, meaning it may have no choice but to shell out the $230m Dura needs in order to protect its already considerable investment in the company. Preview of coming attractions?
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It looks like they could do it the Japanese way, Own your suppliers, If they can work together to make good products it may work. You never know.
Cerberus hasn’t run out of money yet.
good money after bad.
As for Cerberus and their Chrysler investment, remember they basically got Chrysler for free. Hard to fuck up free. Worst comes to worst, they can just shut down the company, sell Jeep to Toyota or Volkwagen or whoever, the names “Dodge” and “Chrysler” to some stupid Chinese or Indian company who doesn’t realize the nameplates are basically worthless (sell them the tooling too), their patents to anybody and everybody, and the real estate where the plants sit to condo developers, and walk away with a significant profit. They can’t lose.
I get emails all the time offering me a better package.
sell Jeep to Toyota or Volkwagen or whoever, the names “Dodge” and “Chrysler” to some stupid Chinese or Indian company who doesn’t realize the nameplates are basically worthless
No way… Then who is gonna honor Chrysler’s Lifetime forever and ever warranty? I mean I could honestly see the proud owner of a 2008 Sebring pulling up to the dealer after the TATA or Chery takeover only to be laughed at. “But the sebring only has 10,500 miles and it needs a radiator and power steering pump? You promised me a lifetime!” I mean how can they continue to sell cars with dollar general interior and expect customer loyalty. I mean did you check out the MSRP ($35,000+) on the new challanger pony car, isn’t supposed to compete with mustang and the new camaro? I could see the tata nano as a new dodge neon mini, with ya know a “Hemi” 1.0L four-banger…
Wait, isn’t a lifetime warrantee only good for the lifetime of whatever it is that just broke?
You know. “What about the lifetime warrantee on my radiator/fuel injector/high quality plastic interior parts/air conditioner compressor? The car only has 10,500 miles on it!”
Dealer: “The lifetime warrantee finished at the moment the part failed. $859.26 – please.”
I’d rather have a used Suzuki Aerio than any new Chryco product. At least the warrantee is “real.”
For that matter, I’d rather have a 2002 Daewoo than a new Chrysler, Ford or GM product, but that’s another story…