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A worthy investment.

Wednesday, 6 May, 2009

We, that is the Federal Government, are into Chrysler to the tune of about $4.5 billion. The new post-Chrysler

Despite the words in this very blog, we're not done yet.

Despite the words in this very blog, we're not done yet.

entity shall be owned 8% by Uncle Sam. Canada gets 2%.

In 1997, the last year of operations before the DCX merger, the market cap for Chrysler Corporation was $60.4 billion. (The worth of the company and all of its assets as expressed by value of all issued stock.) Adjusted for inflation, that’s about $83 billion.

If post-Chrysler doesn’t pay back one thin dime of the “bailout money”, but the new company recovers to 1997 levels (eventually) our piece of the action would be worth $6.7 billion in 2009 dollars. This $6,700,000,000 may be leveraged, used as collateral or sold. This does not address the value of the employment provided, taxes paid by the employees and suppliers, and the taxable-and-other value of economic activity by employees of post-Chrysler, their suppliers and down the distribution chain. This does not address the potential value of getting desirable, small automobiles manufactured in the Great 48 and sold in North America. This represents a blatant profit of $2.2 billion or nearly 50%.

If Chrysler pays no interest whatsoever, but returns the money, Uncle Sam banks $11.2 billion on the original $4.5 billion, or 248%.

This is among the reasons so many liberals are rich and so many conservatives are on food stamps.

Yes, there is some risk.

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One Comment
  1. Anne Maron permalink
    Sunday, 24 May, 2009 11:49

    Hey, Stan.

    Of the 500 entries resulting from a search of Facebook, this Stan Baker sounds like our very own from Louisville, KY. Right? Hello again!

    Like

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