Duly Noted #3 Chrysler take-over by Cerbertus

As we will discuss in our above Dawn2Dusk article we have been reviewing the new face of Chrysler as a way to get a glimpse at the future of Mopar as it enters a new stage of it's life under the ownership of hedge fund giant Cerberus. Now here at Automotive Declassified we are not going to put ourselves on a pedestal as business experts, that's not our gig. We do know how to read however, so we can brake down what we have gathered to bring you the basics about the takeover and how it may,or may not, effect your next vehicle decision. So the question we will look to answer is- will this takeover effect the future stability of a Chrysler purchased today? To answer this lets look at the basics of Cerberus. Cerberus was named by it's founding partner Stephen Feinberg after the mythological four headed dog that protects the gate of Hades. Feinberg has self-proclaimed middle class routes and holds onto them to this day. He drives a Ford pickup and still maintains his home in Stamford Ct. that he bought for around $500,000 a number of years ago. He also lives in NYC in an apartment that many would consider inexpensive. Feinberg tries to maintain as normal a life for his three daughters as possible, or as normal a life the family of a $50 million a year hedge fund operator can possible have. Cerberus has it's hand in many diverse industries and doesn't mind purchasing a company in a field that they know little about. Cerberus currently owns several Marriott locations as well as a major share of Burger King, and National and Alamo rent a car chains. Not everything Cerberus touches turns to gold ,as was evident in the bankruptcy of their Budweiser bottling company. This hit and miss record is mainly due to their wide diversification. One thing that Cerberus does not have a record of is a "slash and burn, buy and sell" approach to income building. Cerberus takes each of their entities seriously and does not purchase a company only to ruin it, sell it, and move on. The bottom line is important but the individual company is equally important. This long term approach to company acquisition and profit building does sometimes come with vast reorganization that can leave potential Cerberus targets fearful for their organizations future. Cerberus looks at their company as a total vision and meets each year with the leaders of their acquisitions together to better implement future plans. Sometimes these plans can be rather disruptive to the individual company but ultimately are done to build the value of the company and Cerberus. In relation to Chrysler it seems that Cerberus will be in it for the long term placing aside rumors of a quick sell off of Chrysler's individual brands. In fact there are some rumors that Cerberus may bring back the Plymouth name that was lost in the Daimler buyout. The only fear is that to reach a point of fiscal security Cerberus may feel the need to do some rather major restructuring. Cerberus's independence will also provide it the opportunity of buying components from several suppliers instead of Daimler suppliers that may actually make better products. Cerberus may also be able to steer Chrysler back towards building the world class cars that we first saw from Daimler in the form of the 300 and Charger instead of the new world cars we just reviewed. The problem is that this independence may be more perceived than real since Daimler will still provide the platforms and power trains to Cerberus and will certainly never provide Cerberus with better options than that of their own product line. Personally I would have felt more comfortable if another auto company had acquired Chrysler. As long as Daimler supplies the tech ,Chrysler will be at the "bad end" of Daimler's deep insecurity complex ,that towards the end of their relationship before the sell off became so schizophrenic that it led Daimler to neglect the quality and components of Chrysler products to ensure their own Mercedes brand maintained superiority. So the bottom line for you the customer is that for the near term nothing will happen to the product line or the dealers. The possible upside for you is that all this insecurity will keep dealers eager to get customers in and out of their door in a Chrysler product and this will put you in the drivers seat as far as dealing is concerned. The downside is that banks are very cautious about this takeover which will translate into higher lease rate compared to other vehicles. Another downside is for those who choose to finance for lengthy terms may end up with a far reduced resale towards the end of their loan term which could lead to those individuals paying more each month to finish the loan agreement than the vehicle is worth. For now things will likely stay the same, with a likely increased effaces on drawing customers in and keeping them happy afterwards. An overview of the product line shows that currently the vehicles fit one of three main categories ,with each category sharing parts with each other or other products sold under different nameplates. The categories are 1 ,trucks,including the traditional Jeep products, 2 ,world cars, including the vehicles we have just reviewed, and 3, the rear drive platform vehicles including the 300 and Charger. Each of these shares enough components with other vehicles to insure that parts will be available for a long time to come. It usually is only the "funky" obscure vehicles that have horror stories attached to them, such as when Renault was sold off, mainstream players rarely get effected. In the event that Cerberus decides that their experiment did not work out as well as they thought and sells their interests by dividing up the different marques I'm sure that whoever the buyer would be would leap over walls to make the transition a good one ,even if it was at the detriment of their own customers, no one would want to be known for alienating stranded refuges of a historic Chrysler breakup. But I am getting ahead of myself, this worst case scenario would likely never occur anyway, the point is that this buyout should not shade your decision one way or another. The advantageous purchasing environment may be an attraction. The bottom line is that you must decide if the product is for you regardless of this situation. Chrysler, Dodge, and Jeep are American institutions and will not fade away into the sunset any time soon.