Tennessee Republican Sen. Bob Corker raises an interesting question about who would benefit from the money.
Cerberus Capital Management, a private equity firm, owns about 80 percent of Chrysler but seems unwilling to put additional funds into the company to save it. Corker says he spoke with a Cerberus director who said the private equity shop will not put any more money into auto industry.
“These other guys have a different problem because they cannot access cash,” Corker said to Chrysler CEO Robert Nardelli. “You’re a portfolio company in a private investment firm that has lots of money and they are unwilling to invest that money in your company.”
Corker seems to be trying to get at the question of whether the taxpayer funds would be used to enrich private equity pockets.
Nardelli defended his benefactors and noted that Cerberus is a shareholder in all three companies. The private equity firm is the majority owner of GMAC Financial Services, the financing arm of General Motors. GMAC is currently applying to be a bank, a change that would make it eligible for some of the Treasury Department’s bailout funds.