According to an article by BusinessWeek, ex-Chrysler chief Lee Iacocca stated that, “Daimler screwed Chrysler royally” in the nine years that it owned Chrysler. According to Iacocca the recent sale of Chrysler to Cerberus Capital Management was out of desperation.
Iacocca claims that before Daimler acquired Chrysler in 1998, Chrysler was profitable due to their minivans, the Jeep Grand Cherokee and the Dodge Ram. Chrysler was the lowest-cost producer and the most profitable car company in the world, but now it is all but ruined.
“It took Daimler less than a decade to drive Chrysler off a cliff.”
He also questions whether Cerberus is suitable to run the company and turn it around. This is the first time that an American automaker has been owned by a private firm.
“The biggest fear that people have about private equity firms like Cerberus is that their basic goal is to “strip and flip.” That is, buy ailing companies on the cheap; “restructure” them by slashing costs, jobs, and benefits; then resell them for a big profit.”
Can we really blame Daimler for all of the problems? Surely Chrysler is responsible for some of the problems as well?
Full Story: BusinessWeek