[Pen-l] Commentary: Chrysler secrecy is a big stick

[Charles Brown <cdb1003@xxxxxxxxxxx>]

http://www.detnews.com/apps/pbcs.dll/article?AID=/20090313/OPINION03/903130343
  
Friday, March 13, 2009
Daniel Howes
Commentary: Chrysler secrecy is a big stick 

Chrysler LLC's got a confusing Canada complex.
In testimony before a parliamentary committee, Vice Chairman
 Tom LaSorda threatened to shutter Chrysler's three plants
 there unless it can cut labor costs, secure an $800
 million loan from the government and resolve a nagging 
tax problem worth some $335 million to the struggling automaker.
"Failure to satisfactorily resolve these three factors
 will place our Canadian manufacturing operations 
at a significant disadvantage relative to our manufacturing 
operations in North America and may very well 
impair our ability to continue to produce," LaSorda 
told the automotive subcommittee of the House of Commons in Ottawa.
Brinksmanship by a Windsor native whose father
 was a longtime member of the Canadian Auto Workers? 
You bet. That, and yet more evidence of Chrysler's 
penchant for using its private-company status to 
send mixed messages and sow confusion amid anxiety.
Just five days before LaSorda dropped the hammer 
on parliament, the CAW and such plant towns as 
Windsor, Etobicoke and Brampton, his alter ego, 
Vice Chairman Jim Press, said this in an internal memo:
"In Canada, we were the No. 1 selling vehicle manufacturer 
in February for the first time ever in our 84-year history,"
 he wrote in an e-mail dated March 6. "Congratulations
 to our Canadian operations and our dealers for doing 
such a great job in challenging times."
Translation: Thanks for doing so well in Canada under 
trying circumstances. But if we don't get what we want,
 we'll be forced to shut it all down, to make nearby 
Windsor an economic ghost town and to blame the 
government for euthanizing 9,400 direct Chrysler jobs 
and thousands more at dealerships.
If nothing else, the Chrysler controlled by the shadowy 
Cerberus Capital Management LP of New York has 
shown a recurring willingness to muscle constituents
 reluctant to accede to its demands. Just ask Julie Brown's
 Plastech Engineered Products Inc., the Dearborn 
supplier driven into liquidation last year in a fight with Chrysler.
Could the Canadians be next? Probably not, considering
 rising joblessness, dismal auto sales and the fact a 
Chrysler pull-out would have serious repercussions for
 the government of Prime Minister Stephen Harper and 
Ontario's status as the epicenter of Canada's foreign-owned auto industry.
But the tactic? More of the same for a company whose 
owner won't tell the public who owns it and won't ask
 those investors to pump more capital into the nearly 
failing enterprise because that would violate Cerberus's
 investor guidelines.
Instead, American taxpayers -- and, now, the Canadians 
-- are expected to write fat checks for an automaker 
whose major investors could be public pension funds 
or Warren Buffett or sovereign wealth funds controlled 
by foreign governments. At least struggling General Motors
 Corp., its market cap whittled to $1.33 billion, is 
obligated to disclose the large owners of whatever equity remains.
Chrysler's got a credibility problem exacerbated by 
secrecy, less scrutiny and more corporate muscle.
 It gets a $4 billion lifeline from Treasury, launches a
 massive incentive program that pumps its retail 
market share higher and then, in Press's words, 
emphasizes "that no government loan money was used 
to fund customer incentives."
How do we know? Rival Ford Motor Co., for one, has 
been privately accusing Chrysler of doing just that -- 
using government money to drive sales that prove 
Chrysler's viability long enough to bank more government
 money and then finalize an alliance with Fiat SpA of Italy.
Not true, Chrysler says. And we'll all just have to take their word for it.
Daniel Howes' column runs Tuesdays, Thursdays 
and Fridays. He can be reached at (313) 222-2106, 
dchowes@xxxxxxxxxxx or detnews.com/howes. Catch 
him Fridays with Paul W. Smith on 760-WJR.
_______________________________________________
pen-l mailing list
pen-l@xxxxxxxxxxxxxxxxxx
https://lists.csuchico.edu/mailman/listinfo/pen-l