11 May 2007
The Rise of Deripaska
Actually, there are now three buyers bidding an at informal auction, but the most likely buyer by far is a Canadian auto parts manufacturer, Magna International.
Take that with a grain of salt, and recall for example that the last time I wrote about Chrysler here (on April 6) the favorite was Kirk Kerkorian and his company, Tracinda Corp. They seem to have faded from discussions over the last five weeks.
But assume for purposes of discussion that Magna does get Chrysler. Their bid is worth approximately $5 billion. Magna doesn't have that kind of money in its petty-cash drawer, and will likely raise some of it by selling some of its own equity. In other words, one question now is: if Magna gets Chrysler, who gets Magna?
Answer: an aluminum kingpin from Russia, Oleg Deripaska.
Deripaska is a fascinating character, who even if he does end up owning a large chunk of the company that in turn owns a controlling interest in Chrysler, won't be able to visit the Michigan offices thereof. He was stripped of his U.S. visa last year as a result of the FBI's view that he is (a) involved with organized crime and (b) was less than truthful when they asked him about it.
If what we want if for Chrysler to become and remain a sustainable, productive, even innovative car company: would the ascent of Deripaska be a good thing or a bad thing? I don't know, and I consider his difficult relations with the FBI to be a rather ambivalent bit of data for the purpose of answering that question.
Update, May 14. Oops. Shows what I know. Over the weekend, Cerberus apparently brought this auction to an end, bidding $2 billion more than had Magna.
Cerberus is everywhere, as I mentioned in March.
It continues to creep me out.
Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.