Business Services Industry
Chrysler Sale: The Broader Impact.
Kiplinger Business Forecasts, May, 2007
Byline: Jim Ostroff
The sale of Chrysler will be a wrenching but much-needed step for the U.S. auto industry. By the time negotiations on new union contracts are completed this fall, the changes set in motion by the purchase will leave Chrysler, General Motors (GM) and Ford in a far better position to compete with foreign brands.
Cerberus Capital Management, which is paying $7.45 billion in cash for 80.1% of Chrysler, is going to be the catalyst for change. "Cerberus will demand that Chrysler be profitable soon, not over the long term," says Erich Merkle, forecasting director with IRN Inc., an automotive consultancy.
If the United Auto Workers union (UAW) doesn't agree to big concessions in order to make that happen, Cerberus will simply walk...
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