I Get By With a Little Help From My Friends
I watch with great interest the hand wringing going on with regards to the government bailout of the Big Three automobile manufacturers and, in particular, the bailout of Chrysler.
Unlike Ford and General Motors, Chrysler is a Limited Liability Corporation for which an individual (say you or me) cannot purchase an equity position from a stock exchange. Chrysler L.L.C., you understand, is owned by other business entities, Cerberus Capital Management L.P. (80.1%) and Daimler AG (19.9%). Individuals can buy equity positions in Daimler AG on any number of stock exchanges, including the New York Stock Exchange. Cerberus Capital Management L.P., on the other hand, is a limited partnership owned by individuals who are, well, the partners in the partnership. The partnership is thus nothing more than a private contract between the owners of the business entity.
Ford and General Motors are business entities owned by individuals who, either directly as individuals or indirectly through mutual funds and the like, have purchased publicly traded equity shares through stock exchanges. The business interests of the owners of these corporations is handled through a board of directors with oversight of company executives and their operations. Unlike partnerships, publicly traded corporations are subject to public scrutiny with executives, directors, significant owners and financial results all made public.
So what is the difference in Ford, General Motors and Chrysler. In the end, nothing. Ultimately, all three are privately owned business entities with profits and losses accruing to individual investors.
Now, that is not to say that all investors are equals. Indeed, one or more partners in Cerberus are likely to hold far greater positions than any single individual does in either Ford or General Motors. They are also at far greater risk. So, it seems only fair to me that the partners in Cerberus should be just as eligible for the public dole as you and I.
After all, the only difference is one of size.
As to the matter of a public dole for the Big Three, that's another whole subject.
Unlike Ford and General Motors, Chrysler is a Limited Liability Corporation for which an individual (say you or me) cannot purchase an equity position from a stock exchange. Chrysler L.L.C., you understand, is owned by other business entities, Cerberus Capital Management L.P. (80.1%) and Daimler AG (19.9%). Individuals can buy equity positions in Daimler AG on any number of stock exchanges, including the New York Stock Exchange. Cerberus Capital Management L.P., on the other hand, is a limited partnership owned by individuals who are, well, the partners in the partnership. The partnership is thus nothing more than a private contract between the owners of the business entity.
Ford and General Motors are business entities owned by individuals who, either directly as individuals or indirectly through mutual funds and the like, have purchased publicly traded equity shares through stock exchanges. The business interests of the owners of these corporations is handled through a board of directors with oversight of company executives and their operations. Unlike partnerships, publicly traded corporations are subject to public scrutiny with executives, directors, significant owners and financial results all made public.
So what is the difference in Ford, General Motors and Chrysler. In the end, nothing. Ultimately, all three are privately owned business entities with profits and losses accruing to individual investors.
Now, that is not to say that all investors are equals. Indeed, one or more partners in Cerberus are likely to hold far greater positions than any single individual does in either Ford or General Motors. They are also at far greater risk. So, it seems only fair to me that the partners in Cerberus should be just as eligible for the public dole as you and I.
After all, the only difference is one of size.
As to the matter of a public dole for the Big Three, that's another whole subject.
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