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Will Blackstone Break Chrysler Into A Million Little Pieces?

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Late last night we met up with a refugee from private equity who claimed to have knowledge of what Blackstone’s plan for DaimlerChrysler’s Chrysler business looks like. He hadn’t seen the bid that Blackstone was rumored to have been on the verge of submitting last week but claimed to have been privy to some internal discussions at Blackstone about the fate of the perpetually troubled automaker. He described Blackstone’s plans as “not so much a break-up, but more like a brick through a window.”
This was, of course, after a few drinks and we half-suspect that his boasts of inside knowledge of Blackstone’s plans were just that—boasts that had more to do with the quantity of gin that had poured over the lips of the four or five almost empty glasses sitting on the table in front of him than the quality of his knowledge inside of Blackstone. Those gin soaked lime rinds in the bottoms of the glasses did not exactly cry out “reliable source.”
But it turns out that academic observers who spoke to Fortune about Blackstone’s likely plans agree with our friend. Kind of. Even if not they did not go as far as describing the plans as breaking Chrysler into the “million little pieces” we heard about in the East Village bar last night, the academics seem certain that Blackstone plans to carve up chunks of Chrysler and sell them off. Call it giving Chrysler the EOP treatment.
"For Blackstone, it's all about the game. You buy an asset, and there's a huge amount of value to be unlocked by repackaging the assets and finding buyers," Rensselaer Polytechnic Institute management professor Phillip Phan tells Fortune. "There are really two ways to make money. One is by cutting costs, rewriting pensions contracts, closing capacity and outsourcing to Asia and Eastern Europe, where the auto sales growth is anyway. Or you just sell off the assets and trim product lines."

What would Blackstone do with Chrysler?