The Financial Times is saying that several private equity firms are looking hard at buying Chrysler from its German parent DaimlerChrysler (DCX). The players apparently include Apollo Management LP, the Blackstone Group, the Carlyle Group, and Cerberus Capital Management LP.
Not likely. The UAW would look at a private equity firm as a treasure trove of cash. It would be hard to convince the workers on the line that they should take large pay-cuts and lose benefits when the heads of private equity firms are spending million on their birthday celebrations and being written up in Forbes as billionaires.
The other reason a private equity buyer would not make sense is that, from a management standpoint, they could do less than Daimler, or another car company like GM (GM), to cut costs. With an automotive parent expenses might be shaved by combining management, manufacturing, and product development.
Last we saw, the private equity firms don’t have engineers designing new car platforms.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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