DaimlerChrysler AG Selling Chrysler to Cerebus

DaimlerChrysler AG Selling Chrysler to Cerebus

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DaimlerChrysler AG said Monday it will sell 80.1 percent of its money-losing Chrysler Group to private equity firm Cerberus Capital Management LP for $7.4 billion, unwinding a troubled 1998 combination aimed at creating a global leader.

The deal is a stunning reversal of the $36 billion takeover of Chrysler by Daimler-Benz AG that tried to set the mold for global automotive manufacturers. It also represents a huge bet for Cerberus, which has agreed to take on billions of dollars in pension and retiree health care costs at Chrysler.

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After the UAW failed to grant concessions to ease the woes at Chrsyler, DaimlerChrysler made plans to sell the ailing auto company.
It was announced to day that an equity mangment company would take over some 81% of Chrysler.

Perhaps this is what Chrysler, and even GM and Ford, will need to become competitive in the 21st century.
What I find unusual is the UAW backing the plan. Further cuts would put even more union workers jobs on the line, or so it would seem.



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