Detroit News: Cerberus started shopping Chrysler months ago

The Detroit News is reporting Cerberus started looking for a buyer for Chrysler less than a year after the holding company bought the automaker from Daimler. Recent discussions with General Motors are just the latest in Cerberus’ efforts to shop its car company. Earlier negotiations have included Renault-Nissan, Fiat and Tata Motors of India, which acquired Jaguar and Land Rover from Ford last year.

As reported earlier, the discussions with GM, which began about a month ago, have been on hold during the recent market meltdown, but they could resume soon if the rebound seen yesterday marks the beginning of a trend. Sources close to the talks say the tone has been cautious but some say Cerberus seems anxious to make a deal.

Industry sources say GM Chairman Rick Wagoner and President Fritz Henderson are interested in cutting a deal with Cerberus but members of GM’s board of directors are siding with the analysts, questioning the wisdom of combining the two companies.

While analysts and experts try to envision a scenario where either company comes out a winner, others say General Motors could be interested in Chrysler’s reported cash holdings of $11.7 billion. The money could make it possible for GM to survive until market conditions improve and new vehicles can go into production. Long-time followers of the Auburn Hills automaker will recall a similar attraction for Daimler-Benz in the late 1990s, when Chrysler had amassed a multi-billion-dollar nest egg. However, unlike the DaimlerChrysler merger, the most commonly held vision of a deal with GM would most likely involve simply transferring Chrysler’s cash and turning out the lights.

For its part, Cerberus is interested in the 49 percent of GMAC it doesn’t own though it has been reported GM is not interested in a swap of assets. To read the Detroit News article, please see:

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