The General Motors Corp. CEO Rick Wagoner, in his first public comments about Cerberus Capital Management's acquisition of the Chrysler Group, said last Thursday that it is unlikely other auto companies will share the same fate as the Auburn Hills automaker.
While Wagoner said that he expects further consolidation in the industry, he said he does not believe DaimlerChrysler AG's decision to sell Chrysler is the beginning of a trend. His comments were part of a wide-ranging talk last Thursday to a group of women business leaders in which Wagoner discussed diversity at GM, the automaker's efforts to create energy alternatives to fuel, and the impact of gas prices on the U.S. auto market. "I don't see a rush to privatize in the auto sector," Wagoner said.
DCX announced Monday that it was selling Chrysler to Cerberus, a private equity firm, in a $7.4 billion deal that will make the Auburn Hills automaker an all-American company again. GM CEO said he does not anticipate that his company or the Ford Motor Co. will be purchased by private equity firms. "I don't think you can rule anything out because the amounts of money that are tossed around are so big," he said. "But we're not thinking along those lines at this point."
Wagoner used his speech to take a shot at proponents of federal legislation that would force automakers to significantly boost the average fuel economy of their vehicle fleets. He drew a roaring applause when he said that the largest American automaker is pursuing technology-backed ways, and not "pie-in-the-sky theories, or unfunded mandates, or ill-conceived exercises in regulation," to make its cars and trucks more fuel efficient and reduce emissions. "We at GM are interested in real-world technologies that will make a measurable difference in reducing oil consumption and CO2 emissions today," Wagoner noted.
Responding to queries about planned acquisitions, Wagoner told reporters that talks with bankrupt auto parts supplier Delphi Corp. are moving along, but that a resolution is not "imminent." He also said rising gas prices may prompt purchasers to shift to smaller vehicles, but would not likely drive them to compact or mini-cars. "You begin to see a shift downward," he said. "That doesn't necessarily mean a shift to small vehicles."
Separately, ex-Chrysler chairman Lee Iacocca predicts the Auburn Hills automaker will survive because of leadership inside company. Iacocca thinks there is a lot of life left in the Chrysler Corp., the company he once saved from bankruptcy. Like , the new management could sift the ills surrounding the ailing automaker.
In Metro Detroit, Iacocca said last Monday that Cerberus Capital Management cut a sweet deal to acquire the third largest U.S. automaker for $7.4 billion. "I think they got a hell of a bargain," Iacocca told The Detroit News before his appearance. "But now they're going to have to run it well."
Iacocca, 82, was in town to promote his latest book titled "Where Have All the Leaders Gone?" at a luncheon sponsored by the Metro-Detroit Book & Author Society in Livonia. He retired from Chrysler about 15 years ago after a storied career that included negotiating a government loan guarantee that kept the Detroit automaker afloat in the early 1980s.
Iacocca has never concealed his antagonism about Daimler-Benz AG's acquisition of Chrysler in 1998. And he is just as displeased about the DCX' decision to dump Chrysler this year. "There's one thing everyone agrees on: Daimler screwed Chrysler royally," Iacocca wrote in an article published in the BusinessWeek magazine. In the said article, Iacocca said that Chrysler's management team led by CEO Tom LaSorda has the capability to turn the struggling automaker around. "In the end, it will all come down to leadership," he wrote. "This is the first time in history that a company outside the auto industry will own a major automaker. But in my opinion, the best leadership is still on the inside at Chrysler."
He declined Monday to elaborate on DCX' decision, but expressed his trademark optimism that Chrysler will rebound under the ownership of the private-equity firm Cerberus. "Chrysler can come back," Iacocca said. "You know, I worry more about Ford making it than Chrysler or GM."
