Statement By Cerberus Capital Management

NEW YORK, December 19, 2008: Cerberus Capital Management, L.P. ("Cerberus") issued the following statement today:

Cerberus is pleased that the Department of Treasury has delivered its proposal to provide assistance to Chrysler in the form of a $4 billion secured loan to Chrysler Holdings, LLC the proceeds of which will be made available to Chrysler LLC. Cerberus looks forward to working with the Treasury, and all other constituents, in a supportive and constructive manner to complete the closing of this loan and to facilitate the restructuring and the recapitalization of Chrysler. This loan will provide a bridge to the restructuring of Chrysler automotive's debt and labor agreements. This bridge loan will prevent an abrupt collapse of this industry which would have a severe impact on the economy, eliminating millions of jobs throughout the country, shifting tens of billions of dollars in pension obligations to the government and slashing the Nation's gross domestic product.

Our goal in acquiring Chrysler last year was very simple: to restore this important and iconic company to viability and American control. We brought in new management and new ideas. Cerberus recruited a world-class leadership team to Chrysler to take aggressive actions to facilitate the necessary restructuring, and it had begun to work. Through June 2008, under the Chrysler team's leadership, Chrysler had met or exceeded every financial metric in our underwriting plan, with the exception of top-line revenues, and had over $9 billion of cash on hand. Indeed, under the transformational leadership of the new management team, many of the radical changes suggested in the recent Congressional hearings have already been made at Chrysler.

Unfortunately, shortly after our acquisition the global economic crisis occurred and it has had a swift, unexpected, unprecedented and catastrophic effect on the American economy, and especially on the automobile industry. As a result, Chrysler, along with General Motors and Ford, has been required to seek commitments for present or future financing from the government. Cerberus fully supported the "Auto Industry Financing and Restructuring Act" passed by The House of Representatives on December 10, 2008, and was supportive of the parallel legislation debated by the Senate immediately thereafter.

Prior to the recent Congressional hearings, Cerberus initiated further more aggressive restructuring actions to address the crisis facing the American auto industry. Chrysler also advised Congress in the recent hearings that Cerberus would contractually agree to forgo any profits that could be earned, directly or indirectly, relative to Chrysler as a result of any government sponsored financing. In short, Cerberus had already agreed to "step up to the plate" as a condition to any government assistance.

In connection with the loan to be provided by Treasury, Cerberus has agreed to utilize the first $2 billion of proceeds from Chrysler Financial to backstop the loan allocated to Chrysler automotive. In addition to this, Cerberus believes that concessions by all relevant constituencies will be required to facilitate a full restructuring and recapitalization of Chrysler. In order to achieve that goal Cerberus has advised the Treasury that it would contribute its equity in Chrysler automotive to labor and creditors as currency to facilitate the accommodations necessary to affect the restructuring. Unless Chrysler's labor costs can achieve parity with the foreign transplants, and without the restructuring of Chrysler's debt, Chrysler cannot be restored to long-term health and the government loan will be unlikely to be fully repaid.

Cerberus' investors are comprised of pension and retirement plans (including funds invested for teachers, organized labor and municipal employees), charitable and educational endowments, fund-of-funds, and individual family savings. Cerberus is, therefore, entrusted with the life savings of many retirees, teachers, municipal workers and ordinary citizens. Chrysler's shareholders are no different than the shareholders of General Motors and Ford, and these shareholders include the very people that Congress is rightfully insisting on protecting as a condition of any governmental financial assistance.

Cerberus' role should be properly understood. Cerberus manages and allocates capital as a fiduciary on behalf of these investors. The funds' organization documents and agreements contain typical provisions limiting the amount of capital that can be committed to any single investment. These provisions ensure diversity and protect our investors against exposure to large concentrated bets on a single investment. Cerberus has consistently communicated to its investors that its investment concentrations will generally not exceed 5% of assets under management ("AUM"). The Chrysler investment was initially about 7.5% of our AUM and was the single largest investment that Cerberus has ever made. Cerberus has AUM of $27 billion, excluding the $13 billion of capital we are managing for our co-investors in Chrysler, GMAC and several other investments. This is not "cash in the bank" and Cerberus is not a deposit taking institution that can act as an ATM machine for its portfolio companies. The majority of Cerberus' AUM are currently invested in a wide-variety of assets. Consequently, Cerberus does not have the liquidity to fund the loans requested by Chrysler, and for the reasons stated above could not do so even if it had such liquidity at its disposal.

Cerberus feels an overwhelming responsibility to this industry, the millions of jobs affected by its plight, the potential affect on the already fragile economy, and to America itself. Reform and consolidation of the industry is essential. Not only so that energy independence and environmental protection can be achieved, but also for the long-term sustainability of the industry. Notwithstanding our decision to offer to contribute Chrysler automotive equity to effectuate a successful restructuring, Cerberus is committed to working 24/7 and to do all that it can to ensure that Chrysler has every chance to achieve long-term viability.