Thursday, May 28, 2009

Carlyle Group to Buy Assets from Bankrupt Auto Supplier

Michigan Governor Jennifer Granholm asked for $8 billion in financing for auto suppliers. One supplier, Metaldyne, declared bankruptcy. It looks pre-planned as the company has agreements to sell off segments. Detroit News reported:

Carlyle plans to purchase portions of Metaldyne's Chassis business assets in the U.S., Mexico and Spain. More details were not released.

The Carlyle Group has major automotive holdings, while Carlyle Senior Adviser Mack McLarty owns auto dealerships. Carlyle knows bankruptcy, having lost Carlyle Capital Corporation, Blue Wave Partners, SemGroup, Hawaiian Telecom, and Edscha. IMO Carwash sits on the brink of implosion.

The question is how the Obama administration will funnel money to Carlyle affiliates. President Bush farmed millions of TARP money to Carlyle's Boston Private Financial Holdings. Despite trillions in financial support, banks aren't lending, at least to America's manufacturing sector. That was the message from Carlyle's chief lobbyist David Marchick to a Senate Banking subcommittee. Carlyle Managing Director Michael Zupon echoed the refrain.

Auto's are shut out, thus another lobbyist must ride into D.C.

Neil Dekoker, with Original Equipment Suppliers Association, told Local 4 Business Editor Rod Meloni, "Suppliers have to ramp up buying materials and starting to pay employees and bringing them back again and they won't have the cash unless they can borrow the money from the banks and banks are currently not loaning money to the auto industry."

Dekoker has prepared a plan to put $8 billion dollars into supplier hands. He said he'll take that plan to Washington next week.
Mr. Dekoker goes to Washington with another plan asking taxpayers to fill the role of the financial system? How many ways will the big money boys win?