Buyer for Chrysler announced today; could spell trouble for Dodge in NASCAR
By Greg Engle
Editor, Cup Scene Daily
May 13
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DaimlerChrysler announced earlier today that they have sold the struggling Chrysler Group to Cerberus Capital
Management a private equity firm that specializes in restructuring troubled companies.
The Chrysler Group is the parent company of Dodge which has a large presence in NASCAR.
The deal will undo a 1998 merger that executives at the time hoped would create a powerful automotive giant.
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It could also change the landscape of the American automotive market.
A sale of Chrysler to Cerberus “will shake the ground under people’s feet in a huge way,” Kevin Boyle, a professor at Ohio State University who has written extensively about Detroit as the auto capital told the New York Times this past weekend.
DaimlerChrysler has been losing money the past few years, $1.5 billion in 2006, and has tired several plans in an effort to turn things around.
The latest calls for the company to cut 16 percent of its work force, or 13,000 jobs, even under that plan Chrysler is not expected to be profitable again until 2009. DaimlerChrysler will announce its first-quarter earnings on Tuesday.
A sale to Cerberus could prove interesting to NASCAR. Cerberus owns the car-rental companies National and Alamo, and last year led a consortium that purchased a 51 percent stake in the General Motors Acceptance Corporation, the financing arm of General Motors.
The problem with private equity firms such as Cerberus according to some labor unions and government officials is that the buyouts often include overhauls of companies that consist of massive cuts in jobs or benefits in effect stripping companies of their assets.
The American automobile giants General Motors, Ford Motor and Chrysler are all fighting big foreign competitors like Toyota. Earlier this year Toyota announced that they had surpassed GM in sales and for the first time in history became the largest seller of cars in the US.
One of the big questions will be the value of NASCAR to the new operation. If the new owners decide that they need their resources to fight GM and Toyota and that the loss from stock car racing outweighs its benefit, the rumor that Dodge is pulling out of the series may come to fruition.
Greg Engle the Editor and owner of the Cup Scene Daily, is seeking employment in the Motorsports journalism industry.
In 2006, he spent 34 of 36 weeks on the road covering the NASCAR schedule. He is a National Motorsports Press Association award-winning columnist and has worked for the Sporting News.
Greg has been bylined in newspapers across the country, including the Cleveland Plain Dealer, the Los Angeles Times and the Atlanta Journal-Constitution through the NASCAR Wire Service. He’s also been featured on NASCAR.com, ThatsRacin.com, ESPN and Fox Sports. Greg also host's the nationally syndicated radio show Speed Talk Live that is currently appearing in 78 markets in the US.
If you or your outlet is interested please email him at greg@cupscene.com
NOTE: I'm a one man show, not supported by anyone. If you wish to donate to help offset expense, it would be appreciated:
 
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