Cerberus must guard the personal data

Edward Lapham is the executive editor of Automotive News. He writes commentaries for Automotive News online every business day. His commentaries also can be found here.

Edward Lapham

Automotive News
May 22, 2007 - 3:31 pm

What worries me most about the pending Cerberus takeover of Chrysler has nothing directly to do with the automobile business or even the way the private equity firm will treat the automaker's other stakeholders.

My biggest concern is what could happen after Chrysler Financial is tucked into the Cerberus portfolio.

The issue isn't really the specter of a hookup between Chrysler Financial and GMAC Financial Services. GMAC and Chrysler are in the same business but they don't directly compete because, mostly, GMAC finances GM products and Chrysler Financial finances Chrysler products.

Call me paranoid, but what makes me nervous is the massive consolidation of personal financial information that will be in the possession of companies controlled by Cerberus, and therefore in the possession of Cerberus itself.

And it's not just GMAC and Chrysler Financial.

Cerberus also has investments in the department store Mervyns, Houston-based Aegis Mortgage and Green Tree, a consumer loan company in St. Paul, Minn.

And that's just in the United States. Aozora Bank, based in Tokyo, and Bank Leumi, which is headquartered in Tel-Aviv, also are in the Cerberus portfolio.

I'm sure that each of those financial institutions complies with all applicable regulations and uses the utmost care to safeguard its customers from identity theft and other abuses of their personal information and data.

The powers that be at Cerberus undoubtedly are mindful of the awesome responsibility they have and almost certainly have installed firewalls and other protections to keep the data separate and prevent anyone from co-mingling them.

But in this era of rampant identity theft, when a stolen laptop can be a treasure trove of personal information with the potential to wreak havoc in thousands of lives, anything is possible.

Is it so tough to imagine someone -- a disgruntled employee, determined terrorist, cunning mobster or even a hormone-deranged teenage hacker -- defeating the security system and violating millions of us?

Yes, I know, I know. That stuff only happens in the movies or on TV.

Call me paranoid, but I'd just as soon not risk it.