Cerberus/Chrysler Deal a Snow Job?

May 30, 2007

In "Chrysler at the Gates of Hell," on the Huffington Post blog, Automobile Magazine’s Jamie Kitman ventures to say that after Cerberus Capital LLC, the owners of the newly named Chrysler Holdings LLC, is through with Chrysler and the UAW, publicly traded companies — often maligned for having short-term returns in sight with long-term strategies left to suffer — will look benevolent in comparison. He also speculates that more predatory loan practices are just around the corner as Cerberus, which bought GMAC last year, now also has access to Chrysler Financial.

But more importantly, one tidbit that Kitman mentions, which has been a sin of omission for many news outlets in recent weeks, is that three ex-politicos, each fallen from grace in the political realm, are involved with Cerberus, with formerly much-ridiculed Vice President Dan Quayle helping steer the well-stocked ship. Quayle is Chairman of Cerberus’ Advisory Board, and has been heavily involved with the investment firm since 2000. Additionally, former Treasury Secretary John Snow and former Defense Secretary Donald Rumsfeld are also involved in Cerberus.

In recent years the once much-ridiculed VP has served as the door-opener for Cerberus, helping to get the group into new markets that would be otherwise difficult and buying them direct access to high-ranking execs. In fact, Quayle helped the private firm establish an office in Germany in 2003 (in of all places Frankfurt), according to information in the former VP’s official bio.

Kitman remarks, “The man who forgot how to spell potato is chairman of Cerberus' global investments unit. Can you imagine corporate officers accountable to shareholders choosing him for an important job?”

UAW president Ron Gettelfinger has been widely criticized in recent weeks for accepting (and endorsing) the purchase of Chrysler by Cerberus before even meeting with the group. Cerberus had provided a written statement saying that there were no plans for additional job cuts directly connected to the sale, but in recent weeks there has been widespread speculation that the group is contemplating how to streamline, or possibly outsource, a significant portion of Chrysler’s production.—Bengt Halvorson

Chrysler At The Gates Of Hell—HuffingtonPost.com

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