First off, the Republicans pushed for money to help keep most of the bigger financial firms open for business. The opening shot for the mighty taxpayer rip-off.
Let's see now. That's right. Then it was the banks with their hands held out, waiting for their share of the taxpayer loot. now we have the Big 3 automakers wanting some bailout cash that they can call their own.
The majority of the GOP are for these bailouts, no matter how much the taxpayer ( you and I ) has to dish out.
Have you wondered why the Republicans like these bailouts? It is not because of a profound love of their country.
With all the connotations of state intervention AKA "socialism", it has been surprising that the Republican so keen on bailing out the financial sector and the Big 3 auto makers. So the suspicious may well ask "what gives?"
The answer may well lay in the answer to another question;
What do the following have in common?
Chrysler;
General Motors Acceptance Corp. (GMAC - the finance company);
National and Alamo car rentals companies;
Bus manufacturers North American Bus Industries, Optima Bus Corporation and Blue Bird Corp;
Coach operating companies Coach America and American Coach Lines;
Austrian bank BAWAG P.S.K.;
Japanese bank Aozora Bank;
LNR Property, a Miami based real estate development and investment firm;
Firearms companies Bushmaster Firearms, Remington Arms, Cobb Manufacturing, DPMS Panther Arms and Marlin Firearms;
Pharmaceuticals company Bayer's plasma products division;
Mervyn's department stores.
The answer is that one private equity investment company owns or has controlling interests in "all of the above". Cerberus Capital Management.
As you might suspect of a company that has John W. Snow, President George W. Bush's second United States Secretary of the Treasury, as its President and employs Dan "Tomatoe" Quale to head one of its divisions and act as a spokesperson; Cerberus has some rather interesting relationships with and are major contributors to Republican politicians. Leveymg had an excellent diary explaining some of their excesses and relationships with the Republican party last year. This included:
Cerberus Capital Management (dba, Cerberus-Gabriel), is at the center of an emerging Pentagon and CIA contracting scandal that has the attention of three Congressional Committees.
In each case, the companies under investigation have links to prominent GOP figures, including Vice President Dick Cheney, former Vice President Dan Quayle, former Defense Secretary Donald Rumsfeld, and several Republican Congressmen indicted for corruption involving kickbacks from defense contractors.
Cerberus owns, or had a major interest in, a string of now-bankrupt companies that had contracts with U.S. defense and intelligence agencies that were found to have a common pattern of large-scale fraud, security problems, and financial scandals involving GOP lawmakers and lobbyists.
Cerberus donated $100,000 at a single fundraiser to Rep. Jerry Lewis, fmr. Chair of the House Appropriations Comm., who served as intermediary to distribute money to fellow GOP lawmakers favored by Cerberus
These are tasters from a long and thorough diary and obviously could not take account of their contributions for the recent elections. Nevertheless, it's a fair bet that largesse continued (or they know where bodies are buried) so their influence over the Republicans remain.
The usual focus of the Casandras for the auto industry usually centers on GM. Cerberus hold an 80.1% stake in Chrysler having paid Daimler 7.4bn euros ($10.1bn equivalent at the time) for it in August 2007. As an investment that might not be as good as it sounds for on August 23 2008 Reuters reported.
At the end of December 2007, Daimler’s 20-percent stake in Chrysler was valued at about $1.18 billion.
At the end of June, Daimler valued that investment at about $219.6 million.
Today, Daimler said the book value of that 20-percent stake is zero.
That's right, one of its two owners reckon that Chrysler is worth nothing, zilch, nada. For all their donations and lobbying Cerberus do not have two cents from Chrysler to give an opinion with. Now they want a share of $50 billion for a company they paid $10.1 billion for and Automotive News explains they are after GM's vehicle operation, already having 51% of GMAC.
The two companies could squeeze as much as $10 billion in savings by closing plants, discontinuing slow-selling models and cutting jobs.
Our translation: Chrysler would become a ghost town. GM's own staff can handle engineering, design and marketing for both companies. Many — probably most — of Chrysler's white-collar employees would be laid off.
That rather goes againsttheir claim that
We believe competition makes the global economy more productive and more efficient, which enables companies to succeed long-term in the globally competitive marketplace.
Not that they would be bothered as the Automotive News article concludes:
Cerberus wants out, and General Motors is the escape hatch.
Cerberus have also been caught out in the subprime mortgage crisis. In August 2007 they closed the mortgage company they owned, Aegis Mortgage That precedent does not bode well for the employees of Chrysler or GM if they get their hands on that company too.
Aegis, which was founded in 1993, closed its mortgage production operations on August 6. Two days later, employees were warned that there would be layoffs within 60 days and that benefits would be terminated effective midnight August 10, according to Aegis employees. They were also told that earned paid-time off would not be paid out and that there would be no severance. When the layoffs came on Monday, August 13, 782 people out of 1,302 employees were fired. Those let go were shocked to find that they were not eligible for COBRA. While Federal law requires businesses with more than 20 employees to offer departing workers the chance to buy an extra 18 months of health insurance, it is only required for companies with an active benefit plan, and Aegis had terminated its plan days before. Moreover, Aegis admitted in its bankruptcy filing that it didn't have the money to pay employee benefits anyway.
Perhaps it's time to call the "auto industry bailout" what it is - a bailout for Cerberus, Dan Quayle, John Snow and a refill for the Republican party's ATM. DKos
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