August 05, 2020
The NYT had a piece on how the private equity company, Cerberus, is unhappy with the operation of the German bank Commerzbank. Cerberus has a major stake in the bank and, according to the piece, is unhappy that it has not moved more aggressively to cut costs, meaning firing people.
According to the article, Cerberus forced the resignation of two top executives at the bank. It then tells readers that it is unhappy with plans to replace them:
“But then, on Monday, the supervisory board nominated Mr. Schmittmann’s replacement: Mr. Vetter, former chief executive of Landesbank Baden-Württemberg, which is owned by state and local governments in southwestern Germany. Cerberus did not regard him as having the experience to fix Commerzbank.”
It is not clear how the paper determined that Cerberus’ objections were based on Mr. Vetter not “having the experience to fix Commerzbank.” Given what is reported in the rest of the piece, it seems at least as plausible that Cerberus is unhappy with Mr. Vetter’s selection because he might be reluctant to engage in large-scale layoffs. That may be what Cerberus regards as “fixing” Commerzbank, but that is not the standard definition of the word.