Bloggers on Cerberus' buyout of Chrysler.

The latest chatter in cyberspace.
May 14 2007 6:26 PM

DaimlerCrisis

Bloggers assess the past and future of Chrysler. They also examine Perfez Musharraf's role in Pakistan's unrest, and feign confusion at the aging clientele at nudist colonies.

DaimlerCrisis:DaimlerChrysler announced its sale of Chrysler to Cerberus Capital Management, a private-equity firm, for $7.4 billion. It comes nine years after Chysler's merger with Daimler-Benz and effectively ends their partnership.

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Wall Street Journal reporter Dennis K. Berman at Deal Journal does the math, and it looks bad for Daimler: "It's actually going to cost Daimler about $650 million to unload a business it spent $36 billion on about 9 years ago. … Like a politician obliquely saying 'mistakes were made,' Daimler goes on to say that the restructuring 'will give rise to a cash outflow' of $1.6 billion … plus another $878 million of 'prepayment compensation.'… And that's how a $7.4 billion windfall actually turns into a bill."

At Kicking Tires, a blog for car buyers, David Thomas suggests that the effect on consumers is small, since Cerberus "already owns a majority stake in General Motor's financial company GMAC … and the most logical step of the Chrysler purchase would be to merge Chrysler Financial and GMAC to help reduce costs. … [U]nless Cerberus decides to sell one of the three Chrysler Group brands — Chrysler, Dodge or Jeep — there shouldn't be a significant change for consumers, at least right away."

The unions aren't thrilled about the buyout, as IT strategist Frank Williams explains at The Truth About Cars.  "DaimlerChrysler Chief Executive Dieter Zetsche said the sale was 'not conditional on any aspects of a collective bargaining agreement.' So the gloves are still off. … The  [Canadian Auto Workers Union's] president, who represents about 10k Chrysler workers, is adamant he 'can't imagine anything to convince me this is in our best interest.' "

And at cars-of-the-future site Jalopnik, Jonny Lieberman remembers back to 1998: "My father, who was still freaked out about German reunification, thought that the Germans owning Jeep was the third sign of the apocalypse. Word on the street was that Daimler was hungry for the soft and bountiful teat of SUV-crazed America. And everyone cried a little bit when they killed Plymouth. Then…came word of the 300C and Magnum. Suddenly, Daimler was here to save America from itself by giving us what we really want: V8, rear-wheel drivers with room for four or more. Thank you, thank you, thank you mein ubermenchen!" But that era came to an end with the lackluster Charger, Caliber, and Sebring: "… [O]bviously, Chrysler's been phoning it in for the last few years."

Read more about the Chrysler buyout.

Pervez-ive problems: Violence erupted Sunday in Pakistan, spurred by President Pervez Musharraf's removal of Iftikhar Mohammed Chaudhry, the head of the country's Supreme Court. One of Chaudhry's senior aides was killed Monday in Islamabad. Opposition parties called a strike after 39 people died in riots, and the government responded by calling a public holiday and forbidding political demonstrations.

At world-politics blog WhirledView, Patricia Lee Sharpe, a U.S. foreign service veteran, sensestrouble for Musharraf: " [A]t last, educated, secular-minded, democracy-oriented Pakistanis from all provinces have something important and someone honest to rally around."

At conservative Captain's Quarters, Ed Morrissey sees time running out for Pakistan's president: "[H]e's showing the democrats that his vision of holistic democracy involves Musharraf increasing his grip on power, or at least maintaining it. In fact, it's impossible to determine just how many of the rioters were democrats and how many were Islamists -- and that is the long-range risk of Musharraf's strategy. Sooner or later, the two factions will discover that they have a mutual interest in getting rid of Musharraf, and the Islamists will benefit the most from that alliance."