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.

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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.