Here’s the letter I sent to my senator, I suggest you do the same!
Dear Dianne Feinstein,
Chrysler is owned by the hedge fund, Cerberus Capital Management, L.P.
Why are taxpayers now being asked to bail out Chrysler when its owner refuses to do so?
I vigorously object to this auto bailout as long as it includes Cerberus. I shouldn’t have to bail out a hedge fund.
Please respond to my letter.
Sincerely
Below find info about Cerberus:
Cerberus Capital Management, L.P. is one of the largest private equity investment firms in the United States. The firm is based in New York City, and run by 48-year-old financier Steve Feinberg. Former U.S. Vice President Dan Quayle has been a prominent Cerberus spokesperson and runs one of its international units.
The company has been a very active acquirer of businesses over the past several years and now has sizable investments in automotive, sportswear, paper products, military services, real estate, energy, retail, glassmaking, transportation, and building products. In 2006, its holdings amounted to $24 billion.
On October 19, 2006, John W. Snow, President George W. Bush’s second United States Secretary of the Treasury, was named chairman of Cerberus.
Notable acquisitions
• Pharmaceuticals – In December 2004, the company announced the acquisition of Bayer’s plasma products business and renamed it Talecris Biotherapeutics.
• Paper products – The company acquired MeadWestvaco’s paper business for $2.3B in 2005 and renamed it NewPage Corporation. Cerberus also purchased, from Georgia Pacific Corporation, its Distribution Division/Building Products and all of its associated real estate. It renamed this new company BlueLinx Holdings, based in Atlanta.
• Government Services (Military, Energy, and Food & Drug) – owns IAP Worldwide Services, which bought Johnson Controls’ World Services division in February 2005, and Netco Government Services.
• Real Estate – Through investment affiliate Cerberus Real Estate, the company has been making direct equity, mezzanine, first mortgage, distressed and special situation investments in all asset types. It also controls Miami Beach.-based LNR Property, a large real estate development and investment firm through subsidiary Riley Property. Cerberus also controls Kyo-ya, a Japan based group of entities that owns several Starwood managed assets in California, Hawaii and Florida.
• Retail – Cerberus purchased 655 of the 2,500 Albertson’s, Inc., grocery stores, forming Albertsons LLC of Boise, Idaho, in June 2006. They also own Mervyn’s department stores, which was acquired from Target Corp. In June 2007, Cerberus acquired Torex Retail Plc., a retail solutions provider in troubled waters, for approximately 400 million US dollars.[2]
• Transportation – Acquired bankrupt ANC Rental, owner of the National and Alamo car rental chains, for $230 million in October 2003 and purchased DaimlerChrysler’s 45% share of debis AerFinance, an aircraft leasing business, in May 2005. Complete acquisition of debis AirFinance (later renamed AerCap) was concluded in July 2005. Also acquired North American Bus Industries, Optima Bus Corporation, and Blue Bird Corp. in the bus manufacturing sector. Cerberus also owns bus companies Coach America and American Coach Lines, which were acquired from Stagecoach Group.
• Automotive – Peguform, GDX Automotive, and Chrysler.
• Financial Services – General Motors sold a 51% stake in its GMAC finance unit to an investor group led by Cerberus Capital Management in November 2006. GM expected to receive $14 billion over the next three years from the sale of General Motors Acceptance Corp. In December 2006, Cerberus acquired the Austrian bank BAWAG P.S.K. for a reported EUR3.2 billion. In August 2007, Cerberus announced that it was closing one of their mortgage companies, Aegis Mortgage.
• Firearms – Acquired Bushmaster Firearms, Inc., from Windham, Maine native Dick Dyke for an undisclosed sum in April 2006, and purchased Remington Arms in April 2007. Under Cerberus direction, Bushmaster Firearms acquired Cobb Manufacturing, a well-respected manufacturer of large-caliber tactical rifles in August 2007. Cerberus also announced the acquisition of DPMS Panther Arms in December 2007.[3][4] Remington Arms acquired Marlin Firearms in January 2008.[5][6]
• Entertainment – Acquired a group of seven television stations, Four Points Media Group, from CBS Corporation in 2007.[7][8]
• Other holdings of the investment group include Formica, Inc., and the Aozora Bank in Japan; and cable operator Galaxy Cable.
• In 2007 Cerberus took over Corvest a promotional products company based out of Largo, FL with arms based in Simi Vally, Ca & Thorfare, NJ.
Cerberus owns a company called NewPage that bought one of our local paper companies. Pretty much the entire economy of the Village of Kimberly, Wisconsin relied upon these mill jobs for about a century. It’s a nice little town. You know the rest. The mill was shut down in September and the workers thrown out on their collective ass. They’ve been agitating and demonstrating ever since. There are buyers interesting in purchasing the plant and re-opening it, but Cerberus has it in moth balls. The real objective is to drive down supply in order to raise the price of the coated paper that was produced here and still is in their other plants around the country. So we get screwed twice: supporting these dislocated workers, and paying higher prices for goods produced by Cerberus companies. Cerberus and other abusive, secretive, and hidden monopolies should be investigated and prosecuted.
Comment by Joanne from WI — December 12, 2008 @ 6:00 pm
Joann from WI, this is exactly why we have to return to the way we incorporated businesses in the 19th century. The company had to be chartered for incorporation in each individual state, it had to prove that it served a public need, and and it could only do one thing — build cars, make paper, etcetera. This also served another purpose: It prevented corporations from becoming ‘too big to fail.’
Grim, I haven’t checked every company on your list of Cerberus holdings, but I’m pretty sure most of them have lost money. It’s possible Cerberus doesn’t have the cash to bailout Chrysler, plus I read somewhere they are trying to either merge with or dump it off entirely to some sucker. Well, the name is appropriate anyway — Cerberus, the three-headed dog who guards the gates of Hades.
Comment by RS Janes — December 14, 2008 @ 7:13 pm
RS, it is astounding that something could be as obvious as why the autos have troubles, yet it hasn’t been solved long ago.
I agree that Cerberus should not exist. However, it apparently is kinder than most of these kinds of companies which grab companies in hostle takeovers, milk them of assets, them dump them.
Something else that must be addressed and soon is how to return to a currency that has a monetary standard. I’m really frightened concerning the inflation that will occur with recovery because of the vast amount of fiat currency now being pumped into our economy.
Twice as many dollars will cause each to be worth half as much.
I remember the Carter years, he inherited the Vietnam Era pumping of money to pay for the war. Carter stood there stupidly looking at the 25% prime rate we had at one point, wondering what to do. We need to return to a gold and silver standard, or something else that establishes the dollars worth against something else so it won’t inflate!
Grim
Comment by grimgold — December 18, 2008 @ 10:46 am