Beyond the general arguments against a bailout of the Big Three there are specific arguments against giving any taxpayer dollars to Chrylser:
Why is the U.S. taxpayer on the hook for Chrysler? Unlike GM or Ford, Chrysler’s rich owner, a private equity fund with multi-billions in private capital available, has $7b to invest in its portfolio company.
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Cerberus should be responsible for saving its investment in Chrysler. Period. Congress doesn’t see want to see union workers out in the cold and doesn’t want to pick winners and losers among the auto makers. So Chrysler gets dollars now too. Too bad for the taxpayers, but it’s the wrong decision Ms. Pelosi. Chrysler will only come back for more. There’s no way that $7b plus Section 136 billions (that’s the Energy Department program for fuel efficiency technology) gets this company to a profitable future. That takes years, not months, and a miracle that the public will find sudden virtue in the Chrysler badges. Are you outraged yet?
If you’re not, you should be.
Cerebus, Chrylser’s owner, is sitting on billions of dollars in cash right now and they’re asking the American taxpayer to bail them out. Someone needs to tell them to shove it.
December 7th, 2008 at 11:21 am
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December 9th, 2008 at 3:53 pm
I completely agree. If Chrysler wants to be bailed out the Government should demand (a) preference shares in Chrysler, (ii) Cerberus should put up some of its other assets as collateral for any loan component, (iii) There should be a ban on any drawings or ‘carry’ / dividends back to Cerberus until all of the money plus interest at a commercial rate is repaid, and (iv) the terms of the preference shares should include an ‘equity kicker’ so that the preference shareholder gets paid part of the profit (if any) Cerberus makes on a merger or sale of Chrysler, and (v) Chrysler should be made to disclose (and have audited) its financial statements for the past 3 years and management accounts to the last month. Only then should Chrysler receive bailout money. Otherwise the American tax payer is just passing cash directly to Cerberus.