Remember the 3 headed dog that guards the gates of the underworld in greek mythology? Makes you wonder if the auto-industry is the three headed dog that guards the gate of a depression. Cerberus Capital Management owns 80% of Chrysler and 51% of GMAC. See more about their role in the economy and a video below.
Cerberus has said they will take no money in profits from Chrysler if the government bails out the company. They also had in mind for the government to take an ownership interest. Now congress has asked them to come up with a better plan and bring it back. It is apparent that they will have to have convincing proof that they will not profit from the bailout. They will have to bring some plan of “accountability�? in Speaker Pelosi’s words.
So who is Cerberus Capital Management, LLC? The company was founded by Stephen Feinberg and Bill Richter, now senior managing directors. But get this, guess who is an executive? Dan Quayle. Yes, the very Dan Quayle who has been brought up in this election as a comparison to Sarah Palin. I know some of you out there are saying, ‘no wonder Chrysler is crap.’ Well John Snow, former Treasury Secretary under the current Bush is also an executive.
In another twist, GMAC announced yesterday that it is applying to be a bank holding company. They are probably trying to get a piece of the bailout that has mainly helped financial institutions. The problem is that under current federal law, non-banking companies cannot own more than 25% of such a holding company. As mentioned above, Cerberus owns 51% and General Motors owns 49%. Cerberus executives are apparently still optimistic that this could go through. Plans are in the work to make it happen.
Cerberus Capital Management Video