I’ve spent an ungodly portion of my day discussing the Chryslerus deal with various reporters — the majority of whom know fairly little about private equity. This is not a knock on them, but just a point of fact. The result has been numerous questions about how many people Cerberus plans to layoff (answer: check the existing Chrysler restructuring plan) or if it will cash out within a few months via a dividend recap (answer: maybe a little, but the term “cashing out” is a BIG oversimplification).
The question everyone should be asking is this: What does Cerberus know that the rest of us don’t? Specifically, does it have some handshake agreement with the UAW in regards to the upcoming contract negotiations? I know UAW gave the thumbs-up this morning, but that’s the easy part. The hard part comes when the two sides have to sit accross a bargaining table that also includes Ford and GM? Two is still more than one (among the Big 3), which means that any tacit Chryslerus agreement could be rendered moot.
There’s probably a good answer out there, but I’m sure glad I’ve been getting asked different questions.