Private equity and design

Bruce Nussbaum has an interesting take on the Chrysler deal on his blog:
Cerberus Should Use Design To Revive Chrysler, Not Just Cut Costs.
DaimlerChrysler Lost Nearly $30 billion On Chrysler. So Why Do Global Managers Think It Is Innovative?

I have some advice for the private equity firm Cerberus that appears likely to buy Chrysler from DaimlerChrysler--don't just cut costs, the way you always do and then flip the company back out to the public. Instead, use Chrysler's deep tradition of design and innovation to reshape the company into a 21st century consumer-driven, adaptable and cool auto giant.

This raises an important question about the deal. Will it simply be a financial engineering deal or a change to create a long term innovative strategy? (By the way, there is a new book out that explains how private equity works -- Private Equity as an Asset Class). My bet is that it will be the former. But we will see. There is a real chance to do something spectacular, as Nussbaum suggests. Let us hope.