Daimler & Cerberus stripped Chrysler of assets, left shareholders & workers holding the bag

[Hannah Bell]

S.O.S. BULLETIN
Voices of the UAW Rank and File
www.soldiersofsolidarity.com
www.factoryrat.com
Issue No. 17 December 4, 2010

Hit and Run Artists Robbed Chrysler And Fled

A Detroit Free Press review of the new Chrysler 200 sedan included this statement buried in the
middle: "We are re-contenting the Chrysler brand" to repair the damage done under past owners
Daimler and Cerberus, said Olivier Francois, who runs the Chrysler and Lancia brands.

The hit-and-run, strip-and-flip operations started with Daimler. The publicly stated reason for the
Daimler/Chrysler merger was never convincing. We do know that Chrysler had a 12 billion dollar surplus when Daimler took charge. All but 2 billion evaporated in the merger's book cooking. Money isn’t lost, it changes hands.

When questioned about Daimler’s alleged losses in the merger, Daimler’s Zetsche was caught telling a
German reporter, “but it was just stock.” In other words, Daimler issued stock, took investors’ money, stuck investors with the risk, then left investors and workers on the hook as Daimler bosses stuffed their pockets.

Daimler and Cerberus —along with their bankers, consultants, and lawyers— swiped fees and
commissions off the top. Fees and commissions, hand over fist, with every piece of paper shuffled, or in modern parlance, with every mouse click. Those fees and commissions should all be tracked down and confiscated. No matter where they are now.

Daimler bosses pilfered all they could, then passed the leftovers on to vultures at Cerberus. Cerberus is
a private equity company, which means they don’t have to make a public accounting to investors. However,
the truth is revealed in hints:

1. Cerberus spun off the Chrysler HQ into a separate real estate deal, loaded with debt. In other words, they borrowed on Chrysler's collateral, then “flipped and stripped” Chrysler real estate, separately from the manufacturing part of the company.

2. Cerberus piled up debts by borrowing so they could siphon capital out of Chrysler. They didn't make normal re-investments in the product line. Then they simply filed for Chapter 11 protection as “slumping sales left it unable to handle its sizable debt load.” That’s strip-and-flip. They borrow and borrow, pile debt on debt, pocket fees, commissions, and special dividends, then claim bankruptcy and stick it to the lenders.

Like hit-and-run victims, we deserve full recompense and damages. Those bosses deserve prison.

http://www.factoryrat.com/factoryrat/modules.php?name=Forums&file=viewtopic&t=13959


PS: The deliberate asset-stripping is an old game. Goes back to the robber-baron era -- at least.

You can do it in countries, too.

[Tunkamerica]

1. your title says cerebus which is an aardvark, cerberus is a multi-headed hellhound

[truedelphi]

2. Maybe that's how the firm presented itself -

"We're not the hound of hell, just a lil aardvark that wants to help the Chrysler brand out!"

[Hannah Bell]

5. fixed, thanks

[pa28]

3. When Daimler practically gave away Chrysler to Cerberus the handwriting was on the wall.

For Cerberus there could be no other reason to take on the liability other than strip the remaining equity. The big lesson, as you alluded to, is you can do the same thing with countries and big money has outgrown the arena of milking companies.

When you see privatization of public assets and responsibility for trillions in private losses shifted to ordinary taxpayers the same principle is at work.

Now for the next stop. During the 80's corporate raiders cherry picked companies that were stuck with too much cash on hand. Right now the US government finds itself in a similar condition with it's 2 trillion Social Security trust fund. Wall Street is just audacious enough to think they can get their hands on that capital and strip the equity in similar fashion.

You know what? They probably will.

[FLAprogressive]

4. that was a shame....Chrysler was basically in a coma at one point. I like what Fiat's doing though.

[Grey]

6. And you are surprised by this .......?

[Anakin Skywalker]

7. Oh damn! Now what are all the old people going to drive?

[Hannah Bell]

8. They're not going to drive anything because Cerberus stole their retirement money.

[leveymg]

9. Cerberus is Madoff and Merkin's gang, the same vultures who stripped Wall Street's carcass

You can asset-strip countries, too, indeed.

See,

Cerberus' fortunes were tied to Likud, GOP, and Madoff, still trying to strip the Treasury

Edited on Sat Aug-29-09 03:21 PM by leveymg

Like many vulture capital funds, CCM fed off of the corpses of companies fattened and then killed off by the policies of Right-wing administrations. War produced most of the roadkill, and bad industrial and public finance policy accounted for much of the rest. Then, there were the bailouts. Lots of rotting meat to feast on at the public expense. But, that's a game that can only be played so long.

See,

leveymg's Journal - That was a heckuva deal for Cerberus that ...That was a heckuva deal for Cerberus that bought Chrysler in 2007 for $1.35B. Posted by leveymg in General Discussion Wed May 06th 2009, 02:30 PM ...
http://journals.democraticunderground.com/leveymg/411 - Cached - Similar -

leveymg's Journal - MYTHS ABOUT MADOFF'S “PONZI SCHEME” – Bernie's ...1 post - Last post: Mar 17
Advertise on more than 70 progressive blogs! leveymg's Journal .... In May 2004, Feinberg's private equity group, Cerberus Capital ...
http://journals.democraticunderground.com/leveymg/400 - Cached - Similar -
Show more results from journals.democraticunderground.com

Daily Kos: State of the Nationleveymg's diary :: :: The web connecting major GOP donors to the US .... Cerberus-Gabriel, a large Israeli hedge fund has been identified as the owner of ...
http://www.dailykos.com/story/2007/3/10/21543/2678 - Cached - Similar -

Daily Kos: Larger CIA and DoD Privatization Scandal Emerging from Walter Reed Story, US Attorneys Firing
Larger CIA and DoD Privatization Scandal Emerging from Walter Reed Story, US Attorneys Firing Tweet this submit to reddit ...
http://www.dailykos.com/story/2007/3/10/21556/5045


So long, Cerberus. You were a top vulture, treasury carcass stripper and company killer while you lasted.

My mistake when I assumed these interlocking scams and scandals would actually kill off this huge carrion-eater. Too big to kill.

[hootinholler]

13. Isn't that Poppy Bush's main vein?

I didn't have the Madoff connection.

-Hoot

[leveymg]

16. A number of connections between Cerberus and both Bush Admins.

John Snow (ex Treasury Sec. - Cerberus CEO), Dan Quayle (Cerberus Board), Rumsfeld (investor), Cheney (Cerberus subsidiary that got Army contract to privatize Walter Reed Hospital was headed by Halliburton-KBR subsidiary exec), other high-level exchange of execs between Carlyle and Cerberus, both of which are big holders of "distressed debt" acquisitions (vulture capital).

Yes. That hit a vein.

[xchrom]

10. Recommend

[notadmblnd]

11. If I did something similar and on a smaller scale, it would be called fraud

and I would be going to jail.

[hobbit709]

12. That's the point isn't it?

If you think too small you go to jail. If you think big enough, you get rewarded with a cushy CEO or cabinet position.

[InkAddict]

14. But, but...if corporations are persons, then these folks were

married "by merger" and a spouse cannot be compelled to testify against the other...never mind,lay down with dogs; wake up w/fleas or without assets and without so much as a bruise, black eye, or broken arm. Do you think for a minute the judge would slap one in jail for what might publicly look like only a "a 1st un-civil offense?

[phleshdef]

15. The Illusive Man won't be very happy about this!

[Anakin Skywalker]

17. Right on, brother! *fist bump*

[Starry Messenger]

18. k

[Arctic Dave]

19. Cerberus is also the group buying up firearm and ammunition companies

and driving up cost.

[Initech]

20. When are we gonna rise up and overthrow these greedy motherfuckers?