The sale of Chrysler to private-equity firm Cerberus Capital Management could be a watershed for the entire industry, the Wall Street Journal predicts. Cerberus thinks it can make the embattled carmaker profitable by restructuring its debilitating $18-billion health care and pension liability. If it succeeds without resorting to bankruptcy—which the airlines have found necessary—GM and Ford will surely follow.
The very possibility sent stock in GM and Ford soaring yesterday. Cerberus chairman John Snow said running Chrysler privately could afford automakers the patience to effectively restructure. Detroit's big three are hoping to sell the UAW a more favorable group insurance package this summer.