Now that the DaimlerChrysler conglomerate has been undone and a private equity firm is set to take over operation of Chrysler, current and would-be owners of new Chrysler products are wondering what it will mean for them. In the short term, the answer is likely to be, "Business as usual." Corporations as large as Chrysler do not change direction quickly and it will take time to see what sort of management changes Cerberus Capital Management LP, which paid $7.4 billion for an 80 percent stake in Chrysler, will make. Looking long term, though, there are some questions that may be on buyers' minds. For example, many of the latest Chrysler vehicles contain parts sourced from Mercedes-Benz. Will the DaimlerChrysler divorce mean those replacement parts could become scarce or more expensive? That's not likely to happen. Manufacturers and their suppliers continue to keep a stock of replacement parts generally for at least 10 years, and because most Chrysler vehicles are built in large numbers, secondary suppliers would likely find it profitable to fill any parts void. A more immediate issue is how the split with Daimler will affect new Chrysler models in the pipeline. Jeep is using the new Mercedes-Benz BlueTec clean diesel engine that debuted in the E-Class Benz sedan. So far there's been no indication existing plans will be changed, but over the next few years look for Chrysler to wean itself from Daimler-sourced technology. A possible benefit to consumers would be if the new owners of Chrysler step up competitive pricing through additional rebates or cut-rate financing. Cerberus is likely to merge Chrysler Financial with GMAC, the former General Motors finance unit that Cerberus acquired a majority interest in last year. Industry observers say it's unlikely an equity firm like Cerberus will hold onto Chrysler for more than five years. Gerald Meyers, retired chairman of American Motors Corp., which was acquired by Chrysler in 1987, told the Chicago Tribune: "They'll clean it up, cut costs and sell it to somebody."  | | This week | | | |
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