Cerberus' Feinberg: Hanging in With Chrysler and GMAC
By Michelle Krebs March 24, 2009
Cerberus Capital Management, which owns large chunks of Chrysler and GMAC, plans to stick with the automobile and financial industries as long as possible, the founder of the New York-based private equity firm told a London newspaper.
"As far as GMAC and Chrysler are concerned, we will hang in there as long as it takes," the reclusive Steve Feinberg was quoted as saying by the Financial Times. "There is the feeling of a greater calling."
The paper's profile of Feinberg posted Tuesday quoted his friends as saying he always criticized them for buying foreign cars, but since buying 80 percent of Chrysler, he's "likely to lecture them for an hour on the subject."
He has only ever driven U.S.-made vehicles, preferring trucks. Immediately after buying control of Chrysler, he switched from the General Motors and Ford trucks a Chrysler-built Dodge Ram. Not surprisingly, he calls it the best truck he has ever owned.
Still, Feinberg's Cerberus came under fire by some members of Congress for seeking government loans for the privately owned Chrysler when Cerberus refused to invest any more. That subject is likely to come up again as Chrysler seeks even more government loans, which it says it needs immediately.
With Chrysler and GMAC both floundering, Cerberus has reduced its exposure in its overall portfolio. The two companies combined now represent 7 percent of Cerberus' portfolio, instead of the previous 12 percent.
"They are less exposed than everyone thinks," Mark Epley, who is responsible for the relations with private equity firms at Deutsche Bank, told the Financial Times. "They are diversified. Nothing kills them."
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