Chrysler LLC, for years the country's third-biggest automaker, faces a clouded
future. In August, 2007, Cerberus Capital Management took control of the
American car company from DaimlerChrysler, ending a nine-year trans-Atlantic
merger. Chrysler became the first American automobile company to be privately
held in a half century.
The merger had been meant to bring two of the oldest names in the automotive business together as equals, and to create a global powerhouse. But the 1998 arrangement did not turn out that way.
For one thing, it quickly became apparent that the merger of equals was really a German takeover of the longtime number three American carmaker. For another, the savings and increased marketing power both sides envisioned never really materialized.
And the hefty profits that attracted Daimler-Benz in the first place,
particularly from Chrysler's minivans and Jeeps, gave way to a series of
roller-coaster years, in which large profits were followed by strings of losses.
In 2006, Chrysler posted a $1.5 billion loss and fell to fourth place in the
American market behind
In February 2007, Daimler announced that it was considering all options for Chrysler, including a sale, and laid out a restructuring plan that would involve cutting 13,000 jobs, or 16 percent of its work force. In the bidding that followed, the winner was Cerberus, which paid $7.4 billion, mostly in the form of investments in Chrysler, for an 80.1 percent stake in the new company, renamed Chrysler LLC.
Only days after the deal was final, Cerberus installed Robert L. Nardelli, the former chief executive at Home Depot, as its new chief executive, even though Mr. Nardelli had no previous automotive experience. As to how it the new company is faring, a financial veil is already coming down over Chrysler, which continues to lose money, although its new owners, who do not have to answer to Wall Street, no longer have to say how much. - Micheline Maynard, Sept. 4, 2007
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