Cerberus, a private equity firm named after the three-headed hound that guarded the gates of hell in Greek mythology, is run by financier Stephen Feinberg. Armed with about $16 billion of capital, Feinberg is taking a huge gamble, many analysts believe.
"Chrysler now has a one-in-five change of being around 10 years from now, which is still a lot better chance than it had yesterday," Peter Morici, a professor at the University of Maryland's Robert H. Smith School of Business, told the AP. "Cerberus might be the only one out there that can do it. They have the management experience, a record of successfully cutting costs, and is willing to bet real money you can make cars in North America successfully."
Cerberus was founded in 1992, and has specialized in buying distressed companies and then turning them around through heavy cost-cutting. With some $25 billion of assets under management, the firm owns about 50 companies with combined revenue of more than $60 billion, according to its Web site.
Those companies include a broad swath of industries, including everything from Formica to Air Canada. In the auto industry, Cerberus owns Guilford Mills, the largest automotive seating supplier in the U.S., and Peguform Group, a German-based manufacturer of interior and exterior plastic parts used in automobiles.
“With its holdings, Cerberus has the potential to reshape the auto industry,” CNBC's Lee said. “The question is legacy costs still held by Chrysler. Will there be enough change to turn Chrysler around?”