I’ve written about them before. Recently, their holding company, Cerberus, sent a letter to stockholders that they don’t expect Chrysler to turn a profit, just hold steady. That’s an odd expectation.
I have said from the appointment of Nardinelli that it looks to be a strip and flip. He didn’t do anything good for Home Depot.
But that letter is interesting – and telling.
I’ve researched the company recently – they’ve been buying US / American “traditional” companies at an ‘interesting’ rate. Quite a few firearms makers and some other hard-core lines. They don’t seem to be interested in major profits, they seem to be content to hold this companies.
My initial reaction to the Cerberus / Chrysler deal was that a wealthy foreign investor wanted to have control of a US company to bring their products in. I haven’t found any hard evidence of that, but that letter doesn’t disprove it, either.
Consider that Ford sold First Nationwide bank because it was only providing a 14% return-on-investment (may have been 12%, memory is fuzzy there). But their (Ford’s) goal was to get 15% ROI. They didn’t get it, so they sold it because the money would be better spent on other thinks (like buying Jaguar & Land Rover). My point is that most US companies are interested in PROFIT. Pure and simple. Greed is good, as the movie says. But Cerebus doesn’t seem to have greed and profit in the list of objectives. That leads to the question of what is their goal?
Many companies involved in the industry of finance or credit, can expect the same fate or worse than that of Chrysler.
I just received my quarterly retirement account statement, it lost 1/4 of its value. Knowing what’s happening out there, I’m luckier than some.
I don’t open that envelope….