Cerberus’ Feinberg: “A Recluse Lifts the Veil a Little”
April 15, 2008

A rare interview with Stephen A. Feinberg, the founder of Cerberus Capital Management, which now owns most of Chrysler and much of General Motors Acceptance Corp., provides the ever-so-slightest glimpse of Feinberg the man, but provides not a morsel of what he’s got in mind for the much anticipated end game of Chrysler.

New York Times’ “Dealbook” columnist Andrew Ross Sorkin spent two hours interviewing the reclusive Feinberg -– “the money man some hope will save Detroit” as he describes him -- at his Manhattan office. It was Feinberg’s first interview in a couple of decades –- and he still refused a photograph. His yearbook picture is the one media outlets are forced to use.

The column, in Tuesday’s edition, describes the mustached, 48-year-old Feinberg as soft-spoken, anxious and seemingly down to earth. “He is no Gordon Gekko,” the author writes. “He doesn’t speak with an air of invincibility; he is soft-spoken and seems uncomfortable playing the role of a mogul.”

The column continues: “…when you meet him, when he looks you in the eye, when he talks about his brother-in-law the police officer, he is so genuine it seems like an accident he is on Wall Street. He is the first blue-collar billionaire I’ve ever met — though he denies the billionaire part.”

The author says Feinberg looks like he would be “more comfortable in jeans and work boots than pinstripes and wingtips (he was wearing an off-the-rack blue suit). He lives in Manhattan, but says doing so is almost against his better judgment."

"I wouldn’t mind living in a small town," he told the columnist. He drives pickup trucks -- a Dodge Ram 2500 and GMC Sierra 2500.

As for his Park Avenue office, the author writes it is “almost threadbare compared with most of (Feinberg’s) peers’ temples of wood-paneled walls and platinum-plated bathroom fixtures. The wall-to-wall carpet hasn’t been updated in years. The head of a massive elk, fixed on the wall, casts a cold eye on visitors (Mr. Feinberg shot the animal on one of his regular weekend hunting trips). An American flag, folded in a crisp triangle, according to honor guard protocol, rests on a window ledge (Mr. Feinberg was in the Reserve Officers Training Corps in college). And smack in the middle of his office sits an almost-life-size model motorcycle that resembles a Harley-Davidson. (He has a real one at home.)”

So why does he scorn publicity so? “I’m embarrassed by it. I don’t think I deserve it. We have a lot to prove,” he told the writer who says Feinberg is almost apologetic about the way his company handled the massive publicity surrounding the purchase of Chrysler and GMAC. "Our approach may have been a mistake with the public,” he admits.

He said he’s not fearful of the press or criticism but he didn’t appreciate its impact on the firm’s companies. In a letter to investors in February, Feinberg wrote:  “We despise all the public attention we are getting” around Chrysler and GMAC and "we do not need to be heroes to earn a good return on the investment in Chrysler.”

Apparently also naive, Feinberg didn't expect the letter to be leaked to the media. “If I knew the letter would become public, I would have explained myself a lot better,” he told The Times. What he meant was that Cerberus could be successful without having to reinvent all of Detroit — but that outsiders might not understand.

Feinberg, whose letter created quite a stir, naively didn't expect his missive to be leaked to the media, including the New York Times columnist. Sorkin, in his colum about the investor letter, said Feinberg sounded "cold and ruthless," which prompted a mutual friend to arrange the rare interview. In response, Feinberg said: “I don’t blame anyone who doesn’t know me from thinking a lot of things.”

Feinberg grew up in Spring Valley, New York, the son of a steel salesman, and went to Princeton where he played tennis but told the columnist he’d have felt more comfortable with the people at a state school. He started his Wall Street career at Drexel Burnham Lambert and left in the late 1980s for the distressed-debt market, eventually forming Cerberus.

Cerberus bought 80 percent of Chrysler from Daimler and more than half of GMAC from General Motors in a 12-month period. Since then, Cerberus has gone from being "hailed a possible savior of American auto industry" to "scrutinized by Wall Street as if he were Britney Spears," the column notes.

Feinberg admits to the columnist that he's worried about the economy and recession "even if we do get things right" and about securitizing debt, some of which Goldman Sachs did securitize last week but at a deeply discounted price. He says he's less worried about Chrysler itself than its hundreds of dealers.

Feinberg reiterated a speech that captivated and encouraged the Chrysler troops when they heard it last summer. Sounding like he is carrying the weight of the world, the columnist writes, Feinberg tells him about Chrysler: “We have a national responsibility. We can’t let ourselves fail. We’re killing ourselves on it because of its importance.... It’s important for American manufacturing not to disappear. It has been a dream to have the opportunity to build these American companies.”

Many inside Chrysler, inspired by Feinberg's pep talk last summer, have since grown skeptical of its sincerity.

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