Tinkering with Chrysler

A Chrysler dealership sign

TEXT OF STORY

MARK AUSTIN THOMAS: So let's say you're Cerberus Capital Management, soon to be Chrysler's new owner, and the seller was so anxious to get out from under they practically gave you the automaker lock, stock and lug nuts. Cerberus obviously thinks it can do better. Marketplace's Steve Tripoli has been asking what the firm's game plan is for a company that cost its last partner an arm and a leg.


STEVE TRIPOLI: Cerberus owns lots of other car-related businesses, from parts makers to rent-a-car companies. Could adding Chrysler somehow make the sum of these companies greater than the parts?
CATHERINE MADDEN: I don't want to say that that's not possible, but I certainly think that's a huge undertaking.

Global Insight's Catherine Madden says Cerberus' more likely strategy is to slash Chrysler's cost structure and then take the company public again.

MADDEN: We may see further assembly-plant cuts. I think we could see a greater streamlining of their manufacturing strategy, as well as getting the necessary concessions from the UAW that are more competitive with the agreements already signed with Ford and General Motors.

TRIPOLI: Can it work?

MADDEN: I think it has to.

TRIPOLI: That wasn't my question.

MADDEN: You know, I think that there's already one step in a positive direction. I think that they see there's profit to be made or they would have never gotten involved in it.

Madden says the ownership shake-up itself could focus Chrysler's stakeholders on making restructuring work.

I'm Steve Tripoli for Marketplace.

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