Cerberus Capital, Chrysler and the bailout

First, read Louise Story's piece on Cerberus and Chrysler.

Chrysler is the smallest of the Big Three automakers, but it stands apart from its peers in another crucial respect. While General Motors and the Ford Motor Company are public corporations, Chrysler is controlled by one of the world’s richest and most secretive private investment companies.

That investment company is Mr. [John] Snow’s employer, Cerberus Capital Management, which has used its wealth and deep connections in Washington to shape the debate over the foundering automakers to its advantage.

In recent weeks, Mr. Snow has personally lobbied Mr. Paulson and others for a federal rescue that would salvage Cerberus’s investments in Detroit. Cerberus has also deployed a corps of lobbyists and former government officials to secure a bailout and protect its interests.

Chrysler’s Friends in High Places


Then Dan Gerstein op-ed in Forbes starts to sound very important. More important than corporate jets worth $100 million or whatever. Because the bailout of Chrysler would be in the BILLIONS, when Chrysler should be going to Cerberus for financial support, NOT the American taxpayer.

Chrysler's Hidden Coffers: Why is Cerberus, one of the world's richest private equity firms, begging for a bailout?

If the US taxpayer were to fund the Chrysler bailout, Gerstein (and I think the US taxpayer should also) wants:

1) complete open books for Cerberus

2) Cerberus CEO, John Snow, to explain why Chrysler will not receive funding from Cerberus; why the bailout needs to come from the US taxpayer when Chrysler's owner is one of the richest private equity funds in the world.

3) Safeguards for the Chrysler bailout money should GM & Chrysler merge (such a merged entity would not receive as much funding as two organizations separately)

4) If Chrysler's bailout is paid for by the US taxpayer, Cerberus forfeits it's investment in all Chrysler & GMAC completely.

5) Our politicians should demand that Cerberus pay for the Chrysler bailout, and not pass the buck to the US taxpayer.