The fact that Cerberus is trying to sell Chrysler's auto-assembly capability to all those who need it should not be a complete surprise. Being a private equity company, Cerberus' goal with any near-bankrupt company it buys is to do whatever it can to make money from the company. Remember that Cerberus is NOT a car company, and Robert Nardelli is NOT a car person. Possible approaches are as follows:

1. Divide up the company into different parts and sell each part separately, with the philosophy that the sum of the parts is worth more than the whole company. If they were to do that, Jeep, Chrysler, Dodge and Chrysler Financial would probably be sold off as a separate entities.
2. Do whatever is necessary, for as little money as possible, in as little time as possible, to build up the value of the company, and then sell to the highest bidder. This looks like what Cerberus is trying to do. If Chrysler can make money as a sub-contract auto-assembly company (for Nissan and Fiat and Volkswagen and possibly others who would like to build and sell in North America while avoiding the high Euro-US$ exchange rate), that is an option. Chrysler has spare capacity at its plants in North America, and it would be cheaper to put them to use for whoever is willing to pay the bill (and hopefully make a little profit while doing it) than to close the plants and pay off the workers.

Right now, it does not look like Cerberus will take the first option of selling off the parts. It does look like they are taking the second option of investing a little bit in the company in the hope that the value can be increased enough in 2 to 5 years so that they can sell for a profit.

But, they may also do both. GM and Ford have selected the first option. GM sold off its finance arm, GMAC, largely to Cerberus. Ford sold off Aston Martin, then Jaguar-Land Rover, perhaps Volvo sometime in the future, and there has even been talk that Mercury could be sold also. I could see Cerberus selling off Jeep. Would someone buy Dodge for the minivans and the Ram trucks? Who knows? There is nothing that cannot be sold off when a company becomes desperate. Examples? GMAC was a money-maker, yet GM sold it off. I cannot imagine the Mercury brand being sold off by Ford (perhaps because here in Canada, Ford has not sold any Mercury-branded vehicles for a number of years now).

 

Ford won't sell Mercury; it has no equity or value toward any automaker. If anything, they will quietly phase it out. Right now, Ford is waiting until Lincoln is revived to bring Mercury back to life, which won't be until 2010 or 2011 at the earliest. Mercury is getting a refreshed Milan and a new RWD car to replace the Grand Marquis in 2011, and Ford has stated that they will continue to invest in the brand.

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As for Cerebus and making Fiats at Chrysler plants, it makes sense. Rather than shut down plants, sell off some capacity. It's a win-win scenario for both Fiat and Chrysler; Fiat wants to re-establish itself in the American market with Alfa Romeo, and Chrysler desperately needs short-term cash to get some traction under its feet. While speculation has fluttered around in the past about Cerebus attempting to dismantle Chrysler, nothing in this article indicates any sign of worry. I see this as a first step toward a light at the end of the tunnel.

 

^^^Mercury sold off? I thought they were just going to kill it. Plus who the hell would buy re-badged Fords?? If they did they would have to revamp the whole line up cause they are dressed up Fords.:lol:

 

I don't believe it either, but I remember reading it somewhere. It was probably written as a far-off "what if". What if the sale of Aston Martin and Jaguar-Land Rover does not save Ford, what else could they sell??? Ford can still sell off Volvo. But unlike Volvo, which has its own hard, "brick-and-mortar" assets -- products like its own distinctive cars and engines, and its own assembly plants -- Mercury is nothing but a brand, a name. It does not even have distinctive product anymore (only re-badged Fords, as you said). Unless there is some old, rich fellow out there who grew up with Mercury cars in the family, so is really nostalgic about the brand, I cannot see anyone interested in the Mercury name. Why not try to sell off Lincoln?