Translating Corporate Speak: Fiat/Chrysler Edition

13 Jan

Fiat/Chrysler Honcho Sergio Marchionne is just as full of shit as his peers at GM were.  He claims that the firm’s #1 goal is to refinance their debt to the U.S. and Canadian Governments with private loans/bonds or possibly even an IPO.  Perhaps – and I’m just throwing this out there – his #1 goal should be, uh, running a freaking car company…

Remember when GM was prepping the IPO and the rushed re-payment of Government bailout loans?  They said the same sort of BS.  “We need to repay the Government ASAP because the loans are hindering our financial position.”  Right.  The generously-granted Government loans that you got after slashing half of your pre-bankruptcy debt are such a huge problem.  Not dysfunctional corporate culture, operations, and management.  Right…

Let’s be honest here: the ONLY reason GM and Chrysler want to repay the Government(s) is to get Uncle Sam (and whatever his Canadian counterpart is called) off their back and out of their hair.  It has little, if anything to do with the burden of extreme debt service.  If Chrysler can’t IPO do they really think the terms they’ll receive on private-sector borrowing are going to be more generous than emergency bailout funds from the Government? Please.*

Could Chrysler do an IPO and raise enough money to repay the $7bn it owes the Governments?  I haven’t seen recent complete financial statements so I can’t say for certain, but I sincerely hope investors will proceed with extreme caution if they do.  Chrysler is not GM (and I dont think GM’s prospects are nearly as good as the rest of the market seems to think they are).

Learn how to read between the lines when company executives talk.  It’s a skill that will serve you very-well over time.  I promise.

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