Private equity firm Cerberus placed a large bet during Bozella’s Chrysler tenure by buying controlling interest in Chrysler from Daimler.
John Bozzella, a veteran domestic auto industry executive at Ford and Chrysler, is the new president and CEO of Global Automakers, the lobbying arm of the offshore brands effective 1 April 2014. He comes at a time when foreign automakers have 53.2% of the U.S. light vehicle market. (See Frost Bit! Winter Weather Hurts U.S. February Auto Sales)
John served as Senior Vice President of External Affairs and Public Policy at Chrysler Group in 2009, and with the same title for Chrysler pre-Fiat from 2007. In this capacity, he lobbied for state and federal political support to restructure Chrysler using taxpayer money. This ultimately resulted in Fiat owning the company in a controversial deal that saw Fiat put no cash in the restructuring that was financed by U.S. taxpayers but saved UAW jobs. (See Can Chrysler Save Fiat as 2013 Profits approach $2 Billion?)
Private equity firm Cerberus placed a large bet during Bozella’s Chrysler tenure by buying controlling interest in Chrysler from Daimler. Prior to that, it bought 51% ownership of GMAC, the financing arm of General Motors. These bets ultimately failed when Chrysler entered bankruptcy in 2009. Both GMAC and GM went into bankruptcy as well.
Former Home Depot CEO Robert Nardelli, controversial himself, who was running Chrysler for Cerberus, espoused a “find, fix and hold” business plan. He ran out of time when the world entered a Great Recession because the financial markets collapsed – ironically from the reckless practices of the Wall Street establishment that Cerberus was part of.
The bankruptcy of the weakest of the Detroit Three automakers destroyed Cerberus’ 80% equity stake. As part of the restructuring Cerberus was forced to waive its share of $2 billion in Chrysler debt and forfeit its equity stake and ownership of the company’s Auburn Hills, Michigan headquarters.
Since 2009, Bozzella had remained at Cerberus as a Senior Operating Executive where he worked with the firm and its portfolio companies on public policy and economic development matters.
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