Detroit News: Ex-Auto Exec's in Demand With Pending Sale of Chrysler

Daniel Howes: Ex-auto execs back in demand as bidders line up for Chrysler

T hey all left the car-making business -- some in disgrace, others because their paths to the top of Big Detroit Auto were blocked by rivals.

But they're still out there, the Old Auto Gang, not-so-old castaways who are now wanted men. They have a wealth of expertise and lot of other-people's dough close at hand. And as the sweepstakes intensify to determine who might end up with the Chrysler Group its German owners so badly want to jettison, it's fair to ask: Could one or more of these guys end up riding to the "rescue" of Chrysler?

There's the Ford Motor Co. duo of former CEO Jac Nasser and former international operations chief David Thursfield trampling around the private-equity world. Nasser is a managing partner of One Equity Partners, and Thursfield is chairman of Cerberus Automotive Group, named after the three-headed dog guarding the gates to hell.

There are the young(er) bucks like Mark Hogan, a rising star at General Motors Corp. who ran afoul of the United Auto Workers and tired of jockeying for position near the top of GM. So he jumped to run Magna International for the well-connected and well-financed Austrian mogul Frank Stronach, believed to be vying with GM for potential control of Chrysler.

There's Chrysler's former chief operating officer, Wolfgang Bernhard, rumored to be involved in a potential Magna bid now that he's been cut loose from Volkswagen AG, his second unceremonious ouster. The first: Losing the plum job of running Mercedes-Benz because he a) correctly ascertained that fat-and-happy Mercedes needed to change and said so, and b) defied Jürgen Schrempp.

There are the old Chrysler guys like Tom Stallkamp, an early casualty of the German-American fusion because he committed the sin of candor and now is the automotive heavyweight at Ripplewood Holdings. Or Gerald Greenwald, former Chrysler vice chairman and founding principal of Greenbriar Equity Group.

And there's the biggest flame thrower of them all -- Jerry York, the short-time GM director and former Chrysler CFO-cum-adviser to Las Vegas billionaire Kirk Kerkorian, the bete noireof Big Detroit and its historically ossified ways.

Advised by York, he tried and failed to acquire Chrysler in the mid-'90s, tried and failed to sue DaimlerChrysler for deception over the '98 transatlantic merger and tried and failed to pressure GM into a shotgun marriage with Renault-Nissan -- only to walk away altogether.

'A very hard business'

"What are the chances of one of these guys being involved? I'd say pretty good," says John Casesa, managing partner of Casesa Strategic Advisers. "This is a very hard business, even for these smart guys in private equity."

Which is why the Chrysler auction, now defined by the phrase "we don't know what we don't know," is shaping up to be so interesting. This isn't the garden-variety takeover of Daimler-Benz buying Chrysler Corp. nine years ago in a $36 billion deal. Nor is it an aborted three-way due diligence a la GM-Renault-Nissan.

This appears to be a global free-for-all, with a "strategic buyer" like GM facing off against "financial buyers" like the private-equity shops or a strategic buyer (GM?) partnering with private equity to take Chrysler off trembling German hands. Unless, of course, this is all a pressure game and the Germans will decide to keep Chrysler after all.

Guys like the GM executive I ran into Tuesday scoff and spit out the words "delusions of grandeur" at the idea of Wall Street aces or members of the Old Auto Gang buying and running Chrysler. "This isn't stamping out parts. There's product planning, capital allocation, treasury."

Yes, there is -- and more -- though it's fair to say, too, that the idea of GM swallowing Chrysler is its own delusion of grandeur (and a paean to the long-dead good ol' days).

Know what you don't know

But the collective wisdom of the private equity world -- and why they've got so much cash to throw around -- is that its players are generally smart enough to know what they don't know.

They get results by being sophisticated and choosy about talent, not arrogant know-it-alls who try to run things themselves (unless they're David Stockman and the company is Collins & Aikman).

That's why a Chrysler freed from a disgusted parent could still be headed by CEO Tom LaSorda, with a Thursfield as chairman if Cerberus jumps in or a Stallkamp as chairman if Ripplewood steps in. Whoever.

The point is that private equity would be the new shareholder -- and a big one at that -- whose Detroit Auto-smart honchos likely would serve as advisers to management, representatives of the shareholder(s) and, potentially, chairmen of the board.

And one of them, at the top, just might come from the Old Auto Gang.

Daniel Howes' column appears Mondays, Wednesdays and Fridays. He can be reached at (313) 222-2106, dchowes@detnews.com or his blog at http://info.detnews.com/danielhowesblog.