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Nardelli: No more money from Cerberus

by Bill Cawthon on

Chrysler CEO Bob Nardelli told members of Congress that Cerberus Capital Management had turned him down when he requested more funding. The statement came on Friday as Nardelli testified during hearings on the proposed bailout for the Detroit automakers.

Legislators have been especially critical of any assistance for privately held Chrysler, which is looking for $7 billion in loans and another $4 billion to $5 billion for Chrysler Financial to ease its liquidity crisis.

Representative Ginny Brown-Waite (R-FL) asked, “If the private equity company that currently has the major holding in Chrysler has $24 billion currently in assets and they will not put forth any more money to stave off bankruptcy, how can we, in all good conscience, expect the taxpayers to take on this substantial cost?”

Nardelli responded to the questioning by saying Cerberus is made up of many investors, such as pension and other funds, and is unable “to commit, on the behalf of those investors, to put more” money into Chrysler. At the same time, Nardelli said he had asked Cerberus for more money.

“We’ve asked them,” Nardelli said. “We’ve asked every major financial institution. All hundred of those that got TARP (Troubled Asset Relief Program) funding, we’ve asked for funding. We’ve gone offshore asking for funding.”

Nardelli later commented that, despite the value of its holdings, Cerberus may not have the money to invest in Chrysler.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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