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Cerberus Goes Where No Firm Has Gone Before

In the last year, private equity firms have broken the mold over and over again. They have bought technology and finance companies, previously thought unsuitable for buyouts. The deals have gotten bigger; the financing more creative.
But with an agreement to take control of Chrysler, private equity is venturing into virtually uncharted territory, according to The New York Times.
While private equity firms have bought troubled industrial companies in the past and dealt with unionized work forces, no one has tried to grapple with a company with the problems the size of Chrysler’s and with a union as powerful as the United Automobile Workers.

Posted by   at 10:12 AM to Analysis , Companies | Permalink | Comments 0

A Corporate Divorce on the Cheap

Nine years after they exchanged vows at a huge, lavishly choreographed news conference in London, Daimler and Chrysler signed their divorce papers Monday at a sparsely attended briefing in an auditorium at an aging Mercedes-Benz factory here.
As bookends, the two news conferences vividly illustrated the dashed dreams of the Daimler-Chrysler marriage, according to The New York Times' Mark Landler

Posted by   at 10:08 AM to Companies | Permalink | Comments 0

Chrysler buyout deal is a test for the U.A.W.

Can private equity investors fix Chrysler for good, and can they avoid a confrontation with the United Automobile Workers union, Micheline Maynard asks in an analysis in The New York Times.
These are the most pressing questions to arise from the deal announced Monday for Cerberus Capital Management, which specializes in restructuring troubled companies, to pay a total of $7.4 billion to take control of Chrysler, with most of that money to be invested in the newly independent company.

Posted by   at 10:03 AM to Analysis , Companies | Permalink | Comments 0

Washington State outlaws text messaging and driving

Add typing to the list of distractions being outlawed across the country. CBS5.com from Seattle reports that the Washington state legislature has followed through with a bill that bans text messaging while driving, according to thecarconnection.com
While handheld cellphones are banned in several states, banning text messaging is the new frontier as PDAs and smartphones and text messaging become more popular. New Jersey and Arizona are also studying texting bans, the Web site reports.
The Washington law was proposed after a 2006 accident in which a driver on a Seattle highway caused a five-car accident while reading his BlackBerry at the wheel.

Posted by   at 9:50 AM to Consumer rights , Safety | Permalink | Comments 0

DaimlerChrysler 1st-Quarter Profit Rises

DaimlerChrysler's first-quarter profit rose even as the loss widened at the Chrysler Group it has agreed to sell to a private equity firm, the Associated Press reports.
The German-American automaker earned $2.67 billion in the January-March period. Analysts polled by Dow Jones Newswires had expected a profit of $1.88 billion.
The Chrysler Group, which is being sold to private equity firm Cerberus Capital Management in a $7.45 billion deal announced yesterday, lost $1.98 billion before interest and taxes, compared with a profit of $857 million a year earlier. The loss was the result of a $1.2 billion in restructuring charges.

Posted by   at 9:44 AM to Companies | Permalink | Comments 0