The financial turmoil of the preceding two years have brought to light (once again) the role of private equity in the automotive industry.  In recent years, there have been numerous cases of companies changing between being public corporations and private equity held entities - what does the near future hold?

 It is likely that private equity is right now poised to re-enter the automotive industry in a significant manner.  This is because we are presently at an inflection point in vehicle production - it is unlikely that production volume (in North America) will decrease in the foreseeable future, and many companies over-stretched themselves in the downturn, weakening their financial position to perilous levels - theoretically, the perfect time for a value investor (which is how private equity firms position themselves) to step in.  This intervention has pros and cons; the capital brought to the table enables the supply chain to continue uninterrupted and allows for the preservation of jobs; however, transparency for suppliers (for example, via public disclosure of financial reporting) has decreased, and there is a potential for decreased investment in innovation (such as is alleged to have taken place in the case of Cerberus/Chrysler) that could pose long-term threats to the business' viability.