Fiat reports Chrysler in bad shape

The Frankfurt Motor Show is not a happy place this year. The international car industry is reducing production as the global recession causes demand to drop sharply. Adding insult to an injured industry, Fiat CEO Sergio Marchionne told reporters that their new purchase, a small car company called Chrysler (maybe you’ve heard of it?) is in far worse shape than they thought. Receiving the blame for the sorry state of Chrysler is Cerberus, a private equity firm who owned the company for two years, ostensibly thinking they were making improvements. Peter Morici, professor of international business at the University of Maryland, joins us with a look at cars and the inner workings of private equity.