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Painful recovery
Painful recovery
Chrysler's new owner, Cerberus Capital Management, helped structure gas price futures that made possible the "$2.99 Gas Guarantee" incentive program, shown here in a Chrysler promotional photo.
Cleaning up some of the messes left behind by Daimler is also keeping Nardelli busy. Under its ownership, Chrysler extended credit to marginal customers and built vehicles that dealers didn't want, didn't order, and couldn't sell. The result: a portfolio of dud loans and expensive inventory that quickly deteriorated.

Eight years of foreign ownership also left Chrysler stripped of traditional corporate functions: human resources, legal, and finance were all run from Germany.

"They got the house and the china," says a rueful Nardelli, "and we got the napkins."

The new owner, Cerberus, has been low-key but active, sending 20 to 30 employees to Detroit to tackle specific assignments. Since Cerberus has been investing in auto parts companies, for example, its analysts can help Chrysler identify financially troubled ones and adjust its sourcing; Chrysler recently pulled its business from a struggling plastics supplier and moved it to another one.

Cerberus also played a key role in creating Chrysler's $2.99 gas price promotion for new-car buyers. It structured the gas price futures that will limit Chrysler's exposure to future price increases, and it helped arrange the processing of the complex credit card transactions required for the program.

NEXT: Paying the bill

Last updated August 07 2008: 7:40 AM ET
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