Cerberus Buys Chrysler!

The major bit of news that is coming out of Detroit today is that DaimlerChrysler has announced that it is selling almost all of the Chrysler Group to Cerberus Capital Management LP. The sale of Chrysler totals $7.4 billion.

There has been much speculation in Detroit for the last few months as to who would buy the ailing automotive company. Possible buyers that were discussed were General Motors, Toyota, Honda, billionaire Kirk Kerkorian, Cerberus Capital Management, and other management investment firms.

Last year, Cerberus bought a majority stake in General Motors Acceptance Corp. Company chairman, and former U.S. Treasury Secretary, John W. Snow, has pushed hard for Cerberus to hold a major stake in the US automotive industry.

Cerberus has also stated recently that it is interested in furher investing in Delphi. The ailing auto parts maker is very interested in selling many plants, and business sections to raise the company back to a profitable level. It is not known if Cerebus will be adding more money to the investment that it already has in place at Delphi, or if it will be purchasing product or product lines from the company,

Ron Gettelfinger, President of the United Auto Workers has praised the sale of Chrysler to Cerberus. He believes the Cerberus was the best choice for the sale. He has also stated that he is looking forward to working closely with the management from Cerberus.

DaimlerChrysler will still own about 19% of Chrysler. Many of the parts that are currently made by DaimlerChrysler will still be made for Chrysler cars. It is unknown at this point if DaimlerChrysler will officially be changing names to reflect the majority sale of Chrysler.

Over the last few months, many workers for Chrysler have speculated about what the sale of the company could mean for them. The worry revolved around the possibility that another auto manufacturer could purchase the company, and streamline the redundant positions. Many workers are at least breathing a slight sigh of relief in knowing that a non-automotive company has purchased Chrysler.