Bailout Watch 380: TTAC Outs Chrysler Owners. Or Not.
As regular readers know, The Truth About Cars is working hard to try to find out who owns Chrysler—now that [ex] President Bush has provided $3b worth of no to low-interest loans to the technically bankrupt automaker. And now that this selfsame beneficiary of our government’s largess is looking for another $4b loan. And the rest. In our pursuit of this information, we are aided by members of our Best and Brightest who also believe that we should know exactly whom we are subsidizing. Are they the “retirees, teachers, municipal workers and ordinary citizens” that Cerberus claims? Or are the 100 or so unnamed investors members of hedge funds, perhaps from abroad?
A tipster provided the names of four hedge funds that supposedly participated in Chrysler’s purchase. I went to “print” with this information, confident in its integrity. I now have reason to believe that our campaign to “name names” has encouraged an over-zealous response. I have therefore withdrawn those names until I can confirm them with another independent source. I apologize for the mistake and promise to get this information before the next round of bailout “negotiations.”
Meanwhile, I’ve deleted the comment referring to the named hedge funds. And another member of our B&B writes with a good point.
Rather than concern about the foreign owners of Cerberus if I was a US tax payer I would have a great concern that if the FIAT deal is consummated ChryCO would be 35% Italian and 19% German. 50%+ foreign ownership of a company receiving federal dollars is difficult for me to conceive.
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@ tesla deathwatcher: "The way things have gone, the bailout funds have done nothing to help Cerberus. The only ones at Chrysler to benefit from the bailout funds are those who were paid for a few more months to keep the lights on." You mean the ones who own Chrysler's Auburn Hills office building and potentially others and receive rent payments from Chrysler?
Leasing back your own buildings isn't rare. It's a common financial "tool" called an off-balance-sheet lease. Even relatively solvent companies like eBay do this and these are clearly articulated in the company's annual report. The primary purpose is usually to prop up the Return on Assets calculation used to analyze stocks... the buildings are no longer assets, they are an expense and thus deducted from taxes as an operating exense rather than depreciated over time. At least this is the little I remember from my accounting classes. It's been a while. Of course, a tax-deductible expense is only valuable if, unlike Chrysler, you have a profit on which to pay taxes. My guess is that in Cerberus's case the intent isn't quite so well-intentioned, as indicated by others. Additionally, I would imagine that if Chrylser's vehicle operations goes Chapter 7, the holding company will then own the property and the Cerberus leaders will still have something on which to retire. Then again, what will be the value of a bunch of huge empty buildings in the Detroit suburbs when there are no operating businesses left for miles around? Scrap metal? No-income housing?
Chrysler is owned by the Illuminati and the Knights Templar.