There are pros and cons to private equity's new role in the automotive sector. While private equity firms new ideas and methods to run the company more effectively, they also come with a very short-term perspective.
Sound Off: What does private equity's recent investment is Southeast Michigan companies mean for economy?
Neil De Koker
President and CEO
Original Equipment Suppliers Association (OESA)
Private equity investment will help the automative industry accelerate the pace of continued improvement. Ultimately, private equity investment will restructure the players and modify rules of engagement, enabling car companies and suppliers to effectively compete in a global marketplace. Detroit has rools in private equity, as visionaries such as Durant, Macolmson and Briscoe funded early vehicle development. Now names like Ross and Ichan and brands like Cerberus, Centerbridge and Ripplewood are providing the investment. Both now and then, the industry was driven by private financing and in a fluid market, companies delivering speed to market, strong cash flow and commitment to product and process innovation ultimately flourish. The same is true today. These are the companies attracting capital, producing profit and driving Detroit's economy in the next century
Strength Capital Partners
The large amount of new private equity capital that has been invested in Southest Michigan, and in the automotive industry in particular, should be a positive development for the region. In general, an influx of capital brings growth and stability into business. Private equity capital also tends to bring discipline and promotes the market forces brought by capitalism. Michigan as an area needs this injection of capitalism to allow the area to restart overall growth.
William J. Kohler
Senior Attorney and Co-Coordinator
Butzel Long Global...