Cerberus’ Snow: Chrysler Is on the Right Track

Cerberus’ Snow: Chrysler Is on the Right Track

John Snow, chairman of Cerberus Capital Management, which owns 80 percent of Chrysler, said he’s optimistic the automaker is on the right track for a turnaround though he wouldn’t say when profitability restored.

Speaking Monday at the Executives Club of Chicago, the former U.S. Treasury Secretary said the company had not set “artificial deadlines” for achieving profitability, according to Dow Jones.

"What's important is 'are you getting this thing turned around?'" Snow said. "If it takes a little longer or a little less, it doesn't really affect the long-term cash flows. And what we're in it for is long-term profitability and long-term cash flows…This is a big engine. If you get it working right, it’ll reward our investors.”

Snow said Cerberus’ view on when profitability at Chrysler would be restored was unchanged despite the recent slowdown in the auto industry.

He noted that Chrysler, under Cerberus ownership, is able to move much more quickly on strategic decisions -- such as production levels or job cuts -- than it could as a public company.

Snow repeated a story recently told by Jim Press, the former Toyota executive lured to Chrysler to run sales and marketing -- a recent decision to cut production levels took seven minutes, when in the past it might have taken weeks.

He said the company is on the right track with the recent executive appointments, the ongoing relationship building with dealers and moves being made to improve productivity and the product line.

"I think you're going to see a much more customer-responsive company in Chrysler," he said. "It's the new mantra at Chrysler."

General Motors and Ford, both public companies, report third-quarter earnings this week; Chrysler will not because it is now privately held.

Snow didn't comment on speculation of Cerberus combining the operations of GMAC and Chrysler Financial; Cerberus owns Chrysler Financial and a controlling stake in GMAC.

Snow said he’s optimistic about the potential of GMAC Financial Services despite problems in the housing market that are expected to last well into 2008. He said the adjustment in the housing sector has just begun.

"I'm very optimistic about the American economy and about autos as a significant part of the American economy," Snow said in the interview with Dow Jones Monday.

Photo by Chrysler

John Snow, center, flanked by Tom LaSorda, left, and Dieter Zetsche, right, after Chrysler's sale to Cerberus.

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.