Several years ago, I said my final goodbyes to your shores when I brought my partner and children back home to the UK. In leaving, I have tried to tune out the events that you sadly have to deal with everyday.
A long time ago, in what for me is now a far away place, I paid for my University education by working alongside men and women, my brothers and sisters in the United Automobile Workers. That is why I can not tune things out.
In a comment somewhere here at Kos, I wrote how Rush Limbaugh taught me "the Constitution is not a suicide pact." I still believe that underlying premise today. But today, the so called right wing is willing to commit national economic suicide over their unfounded fears of President Barack Obama.
What they are willing to sacrifice, because of fear and hate, is clearly on display in their support of a Republican State Treasurer who is willing to bring down his own economic house.
This is not the action of rational human beings.
It is time for the readers here at daily Kos to equip themselves with the FACTS on Chrysler and the Indiana Pension plans in question.
First, the Indiana Pension Plans in question did not invest in an initial bond offering. Instead, they purchased bonds on the secondary market at an already distressed price hoping to make a gambling type profit. The plans in question purchased approximately $42 million in face value of bonds for $17 million. Under the existing offer, the plans would receive $15 million total representing a small loss of $2 million;
The combined Chrysler-related investments in the three state pension funds in question totaled approximately $17 million. The cumulative loss on these investments under the proposed transaction would be approximately $2 million.
Should Chrysler liquidate, the plans would receive between zero and .18c per $1.00 of face amount;
Chrysler's liquidation analysis shows first lien lenders would get between zero and 18 cents on the dollar in liquidation, versus 29 cents in the proposed transaction. However, Chrysler believes this range is unlikely and that there is low probability of a high-side outcome. The company believes it is more likely to be on the very low end, as for the entire time that Chrysler has been in Chapter 11, it has had very few bids for its assets.
What kind of impact would the "on the table" offer creating a $2 million loss have on the pension plans in question?
- Indiana State Teachers Retirement Fund - This is a reported $7.8 billion fund. The Chrysler debt is less than 1 percent of the fund ($32.2 million or .466 percent of Chrysler first lien debt)
- Indiana State Police Pension Trust - This is a reported $250 million fund. The Chrysler debt is less than 1 percent of the fund. ($1.3 million or .019 percent of Chrysler first lien debt)
- Indiana Major Move Construction - This is a reported $2.5 billion fund. The Chrysler debt is less than 1 percent of the fund ($8.8 million or .128 percent of Chrysler first lien debt)
The Indiana investment in Chrysler does not even show up after rounding.
By not co-operating, what is the Republican Indiana Treasurer putting at risk in his own state?
Chrysler is committed to supporting its operations in Indiana, where more than $150 million are paid annually to Chrysler employees, $20 million in state taxes are paid by Chrysler employees, $3 billion of materials are purchased from more than 200 Indiana-based suppliers, and approximately 3,750 people are employed at 75 Chrysler dealerships. Additionally, Chrysler has donated more than $6.5 million to non-profit and community organizations in Indiana statewide in the past 10 years.
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It is a tragedy that a Representative from Oakland County Michigan is tasked with defending the People of the State of Indiana;
U.S. Rep. Gary Peters, D-Michigan — who represents Chrysler’s Auburn Hills headquarters in Congress — blasted Mourdock’s appeal. He told the Detroit News that Indiana’s pension funds will lose only $4.8 million on its investment, while the state of Indiana will lose over $20.7 million in tax revenue annually if Chrysler is liquidated, as well as tens of millions in lost revenue and expenses and the jobs of 4,000 Indiana residents. "It is quite clear that Indiana’s case is not in the best interest of the people of Indiana. Their stakeholders, including other secured lenders and Chrysler’s autoworkers, accepted shared sacrifice because they recognized their interest was better served keeping Chrysler alive rather than forcing liquidation," Peters told the Detroit News.
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The dark side of my soul says, "let it crash and we will show them how foolish they were."
But the other side tells me we need to bring them back from the edge.