Morgan Stanley’s head of automotive research believes that there is a long-term future for Chrysler and that there is high inherent value in the troubled automaker. But realising that value may mean its private equity owner Cerberus will break up the company.
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Adam Jonas told delegates at Automotive News Europe’s Congress in Turin that Chrysler might have to be transformed in order to become viable but that Cerberus could make a lot of money via a break-up.
“You can imagine Chrysler’s difficulties,” Jonas said.
“They are basically making the wrong product at the wrong time. They have too many dealers, too many plants and too many people.
“But there is value there. I am convinced that Cerberus is going to make a lot of money on this transaction. In the process, Chrysler may get broken up into pieces and it may need to get broken up into pieces in order to keep the constituents of those brands alive.
“I am actually bullish on the longer-term outlook for Chrysler. They have what a lot of people want. There is brand – particularly Jeep – and technology, design capability and US-based, dollar-based capacity that can hit the market relatively quickly.
“In this currency environment, that would be a good thing for an importer with no distribution or local production.
“We think Chrysler is going to get through this time, but [will be] probably smaller, with less products, but they [Chrysler] will not go away.”
Dave Leggett
