Chrysler LLC received its $4 billion low-interest federal government loan Friday to help the auto company continue funding its operations and pay its suppliers for parts.
Those in the powersports industry will recall Chrysler’s owner, Cerberus Capital Management LP, went through a similar problem – paying off suppliers for parts – when it owned Global Motorsports Group, Inc., the parent company of PG&A distributors Motorcycle Stuff and Custom Chrome.
Global Motorsports Group, Inc. was acquired by Cerberus Capital Management in 2005.
Following the takeover, Cerberus executives placed tight controls on Global’s operations, putting decision-making authority into the hands of its on-site representatives. According to some observers, those non-powersports managers subsequently made some mistakes in dealing with vendors and dealers because they didn’t understand the industry.
Three years later, on Jan. 31, 2008, Global filed a Chapter 11 bankruptcy petition for reorganization just a few days after the company was sold to Dae-Li USA Inc. for $16 million plus assumption of a long list of liabilities to more than 350 unsecured suppliers.
Cerberus’ website states, “We succeed when our companies succeed, to the benefit of our portfolio companies’ employees, customers, suppliers and the communities in which they operate.
“Cerberus believes that strong corporate governance is the cornerstone of our business.”
Motorcycle Stuff closed its doors in 2008, after 37 of business. How long, do you think, Chrysler will survive?