Who Owns Chrysler?
One of the most ridiculous aspects of the Chrysler bridge to nowhere $7b bailout buffet: we still don’t know who owns the ailing American automaker. Yes, it’s Cerberus Capital Management, a company with its fingers in many pies, from guns (Remington) to paper (NewPage Corporation) to a chain of TV stations (Four Points Media Group) to bad loans (GMAC). That’s disturbing enough– given that the federal government is shoring-up a deep-pocketed, privately-held company. Worse (again): we don’t know the identity of “ about 100 co-investors” who anted-up when Cerberus bought the domestic automaker from Daimler. Anyone remember Cerberus’ official response to Senator Corker’s question: why don’t you use your own money to bailout ChryCo? “No one is asking General Motors and Ford to pour their money in, and Cerberus has the same shareholders as they do— retirees, pension plans and endowments.” Yeah really? Who are they? Whose investments are we protecting? So I called Cerberus.
I asked Cerberus Spokesman Peter Duda straight up: can he provide a list of the investors who own Chrysler? His answer was equally direct: “No. We don’t release that information.”
Why? After all, we know the investors in many other Cerberus businesses. Duda stonewalled. I asked him if the information blackout was Cerberus’ decision or did the investment group have a contractual obligation with these investors to maintain confidentiality? Duda promised to look into the matter for us.
And here’s the kicker.
When I pressed Duda on the public’s right to know who owned Chrysler– as Uncle Sam had provided the company with a $4b loan– Duda said “If the government asked for the information, we’d provide it.” So had they? “Not to my knowledge.”
If the U.S. Treasury Department has this information, why haven’t they released it? If they don’t have it, why haven’t they demanded it?
Anyone who shares my concern in this matter, should email their Senator and ask them to contact the Treasury Department with a very simple question: who owns Chrysler?
More by Robert Farago
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I have been saying all along that Chrysler and GM should not be lumped together and treated the same. There is a difference between GM which CANNOT get money, and Cerberus, which CHOOSES not to contribute more. I guess one could argue that GM's Board and top 100 executives could be forced to buy $13B of GM stock... In any case, Congress could have made the CRAP (Congressional Recapitalization of Automakers Program) money contingent on disclosure, but chose not to. Just like they missed the chance to put any conditions whatsoever on the TARP money.
For Cerebus to reference "retirees, pension plans and endowments" as investors infers these good people should be held exempt from poor investment decisions by Cerebus. Investments are about risk, not all work out no matter where you are ranked in the stairway to heaven. This is an example of the kind of problems when government intercedes in a commercial process. Money is cheapened and is spend inefficiently, goes into areas that may not be in the best interests of taxpayers and is largely unaccounted for. It is a pull at the heart strings to reference retirees et. al., and while it would be interesting to know who the investors are, other than to catch Cerebus in a lie it is not crucial information. Key is where the money is going and why.