Bloomberg reports today that despite receiving $4b in government aid, Chrysler refuses to open its books to the public which involuntarily bailed it out. It turns out that when Robert Nardelli pledged “full financial transparency” while begging the government to buy into his Pentastarred hell, he was really offering “partial financial transparency.” As in, ChryCo will share the numbers with the Treasury, but nobody else. The weekly status reports, biweekly cash statements and monthly certifications to the Treasury are required to demonstrate that Chrysler is complying with policies on expenses. But as Chrysler Spokesperson Lori McTavish puts it “we are not in a position to mirror publicly traded companies, as our investors remain private. However, the company is obligated to our private investors and lenders, and as such, keeps them apprised.” Earth to Chrysler: your major investor is the public. And we expect more than just a thank you card.
If it weren’t for $4b in tax dollars, there would be no more Chrysler. Hell, your other major “equity” holder, Daimler, recently had the decency to tell the public what we already knew: that their 20 percent stake in Chrysler was worth bupkis. So guess what? Cerberus can claim private ownership all it wants, but a public-money bailout means the public has a right to take a look in the Nardelli’s balance book of horror. If Cerberus or Nardelli can’t live up to the consequences of foisting their failed business on taxpayers, let alone their own promises of “full transparency,” they should probably just forget about the second check they’re going to ask for in January. And Treasury Secretary Paulson should make their submitted financial information public anyway.
Damn straight. Unfortunately, it won’t happen, because if it did, the bailout wouldn’t.
239 comments on Chrysler blog…
http://blog.chryslerllc.com/blog.do?id=564&p=entry
Bernanke s/b Paulsen no?
Curiouser and curiouser!” cried Alice.
Gregg: Duh, thanks. Confusing SecTreas and FedChair is waay rookie. Text amended.
Makes one wish for the good old days when the USA was aRepublic and followed the constitution.
Makes one pine for the rule of old King George. No taxation without representation.
Actually, Cerberus doesn’t own squat, they owe or more to the point the separate LLC owes.
The banks that loaned the original 12 billion to Cerberus and the US taxpayers who just loaned another 4 billion are the owners.
The taxpayer contribution of 4 billion is probably more than what Cerberus has spent of its own money. Such collateral as the HQ’s building in Auburn Hills has been split off into a separate Cerberus fund. They use all of the tricks of an Enron and then some to obscure accountability.
There has to be some way to use the Freedom of Information Act to get at their financials. It has caused a lot of trouble for PE shops and Hedge funds that have public investors such as CALPERS and other big public employee retirement funds.
@Autocorpfin
FOIA would not work here, because even with public money, Chrysler is still a private company. No judge in their right mind would grant a FOIA request in this case.
I think this post is off-base as well. Nowhere in any of the discussions did ‘full transparency’ mean that the company had to reveal its financials for all the world to see. It meant, and has always meant in this context, that Chrysler and Cerberus would share all financial information with the government and the treasury.
I hate to put it like this, but Chrysler’s still a private company and none of us are entitled to examine their financials unless they choose to share them with us.
Droid800 – I have to respectfully disagree. The taxpayers have every right to know how our money bailed out a failing private company. The Treasury Department works for us and lent “our” money – so in essence we’re now the creditors to Chrysler.
I think the real reason that Nardelli & Co. don’t want to share the financials is that they’re just so bad that anyone with half a finance education would know that there’s ZERO hope for salvation at this company. If Chrysler’s retail and fleet buyers and all its vendors knew this to be the case, then the gig would be over for sure.
I think this post is off-base as well. Nowhere in any of the discussions did ‘full transparency’ mean that the company had to reveal its financials for all the world to see. It meant, and has always meant in this context, that Chrysler and Cerberus would share all financial information with the government and the treasury.
I hate to put it like this, but Chrysler’s still a private company and none of us are entitled to examine their financials unless they choose to share them with us.
Once you’re on the public dole, you’re a public company. Cerberus doesn’t have to disclose their financials, but then they’ve set up the corporate structure of this arrangement to strip the liquid assets out of Chrysler while localizing every financial liability possible to Chrysler alone, you can say Chrysler most definitely is not Cerberus. They designed it that way, after all.
Mr. Nardelli’s comments regarding transparency was designed for public consumption and he did not modify that communication with some caveat as to who he would be transparent with. Besides, if you’re running an American company public or private, saying you’ll be transparent with Treasury about your financial situation isn’t a bold effort, its just affirming you will comply with the law.
Obfuscate and hide numbers from Treasury regarding your business condition come tax-time, and you will find transparency with the Treasury isn’t an option to exercise at your moral discretion in the first place.
The tax paying public DESERVES to know, and I certainly think should DEMAND to know what is going on at Chrysler.
@ Porsche986
Totally agree. That Cerberus is playing fast and loose should:
A) Surprise nobody
B) Outrage everybody
The public is footing the bill to bail these morons out, and yet we’re given the collective middle finger. Every elected official should be bombarded with correspondance shouting at the top of our lungs the displeasure we (remember us? The ones who’ve had our money stolen to support a private company??) have with ChryCo’s actions. Given their inability to come clean, they (Chrysler) should be allowed to wither and die. Period. And my wife wonders why I turned down a job at another Cerberus-held company. I couldn’t look myself in the mirror if I did…
As much as I disagreed with the bailout, I agree with Chrysler on this point.
Receiving public money does NOT require you to then expose your books to public scrutiny. People who receive government welfare checks do not have their balance sheets posted on the internet – neither should Chrysler.
If public posting of Chrysler’s books is what the government wanted, then it should have BOUGHT the company. The fact that they discuss the gritty details with the Treasury department is good enough for me. That IS public oversight by our representatives in Congress and the Treasury department. Don’t expect Chrysler to e-mail their books to every taxpayer, folks.
Receiving public bailout money DOES NOT make you a public company. The goal, after all, is to pay it back. If Chrysler actually does pay it back (hold the laughter) then would we still expect this private company to “open the kimona”? No.
Receiving public bailout money DOES NOT make you a public company. The goal, after all, is to pay it back. If Chrysler actually does pay it back (hold the laughter) then would we still expect this private company to “open the kimona”? No.
No investor (unless you’re a Madoff client, apparently) throws money at something blindly without knowing what makes it tick financially. The public are the investors and creditors in that enterprise. What creditor can be denied access to the financial condition of their investment?
Like I said, complying with the Treasury department as far as oversight and records-access is something any private-sector entity (including individual persons) is compelled to do by law. Its just a cop-out to keep the blinders on the actual creditors of the company, i.e. you and me by claiming “transparency” with the Treausury.
If you have a problem with this, contact your Congressman. All of you who wanted to impeach Pres. Bush, may finally have your chance. Either the law was broken, or it was not. If it wasn’t, promise your Congressman that you will vote for, and contribute to the campaign of his opponent in 2010 – AND THEN DO IT. Not only do it, but tell the guy who gets your check why he is getting it, and that it will happen to him as soon as he screws up as well. I am starting a fund now, for the next election.
More of a reason not to purchase a vehicle from Chrysler, LLC.
Besides a shitty product portfolio, of course.
I would humbly suggest that at least some of the vitriol on this matter be directed at the Giant Brains in Stuttgart who bought Chrysler, drained it of cash, and then pushed it to the curb to die.
An appropriate follow-up would be to then chase the $700B thrown at Wall Street. Heck, however appropriate or inappropriate the TARP fund may be, the degree of transparency Chrysler has offered is orders of magnitude better than what we know of how Wall Street is spending American dollars.
@Ken Elias,
I respectfully have to disagree…I agree, Chrysler is a private company and has no requirement to share it’s books. What I don’t agree with is the motive. Chrysler COULD appease the public by sharing financial information but it won’t. The reason I believe is because where MB sucked out proprietary technology and spit out the company, Cherbus is sucking out cash and assets. When time comes for the Gov to collect its return, there will be nothing left but the employees.
Oh, and its the US Governments $4b. It ceased beig mine when they took it from my wallet. I have never had a say in how they spend it.