I Want A Challenger
Failing a Challenger, I'll take a Charger. SRT package on either one I receive, thanks. I figure it's the least the .gov and Chrysler owe me for involuntarily propping up the zombie of a corporation. Since Chrysler isn't giving the money back, we should be getting free cars. Oh, wait an 8% share of the revenant is supposed to adequately compensate the US Treasury for the $7,200,000,000 we pumped into the dying dreams of the UAW.
Let me see. Some quick math is necessary here. For 8% of the new improved undead automaker to be worth $7.2 billion, that implies the entity going forward is worth $90 billion. Fat fucking chance. GM's assets were barely worth that much at year-end, and they ain't now. Chrysler sure as hell doesn't have that much on the balance sheet. Alternatively, some schmuck is thinking there's a reasonable chance Chrysler will start making money again and that 8% will someday be worth the money we paid. Well, hell, that's easy math. It's a net present value proposition, right? How much money does Chrysler need to make for the UAW Employment Plan to be worth what we paid for it? Well, assuming a discount rate of 4.25% (the latest number for 30 year T-Bonds) we can just about break even if our 8% of the profits is $430 million a year for the next 30 years. Over a shorter time horizon, the number goes up. Of course, I've never seen a discount rate that low out here in corporate America, either. The number goes up if we assume a higher discount rate, too. Figure the odds of that happening. I'm not even going to try because I'm well aware of the computational limits of my machine and software.
Now, keep in mind I got my engineering and business degrees from state school here in Texas, so I might not be up to the minute on the fancy financial thinking emanating from DC. All I can see from out here in the sticks is we, as unwilling taxpayers, are getting shafted to benefit somebody else. If I can figure this out, surely your beneficient elected leaders in DC have someone around who has noticed as well. So they must not give a rat's ass. Yay!
Short answer: all the rest of us taxpayers just got screwed to benefit the UAW and some Italians. Hope and change my pasty white ass.
Let me see. Some quick math is necessary here. For 8% of the new improved undead automaker to be worth $7.2 billion, that implies the entity going forward is worth $90 billion. Fat fucking chance. GM's assets were barely worth that much at year-end, and they ain't now. Chrysler sure as hell doesn't have that much on the balance sheet. Alternatively, some schmuck is thinking there's a reasonable chance Chrysler will start making money again and that 8% will someday be worth the money we paid. Well, hell, that's easy math. It's a net present value proposition, right? How much money does Chrysler need to make for the UAW Employment Plan to be worth what we paid for it? Well, assuming a discount rate of 4.25% (the latest number for 30 year T-Bonds) we can just about break even if our 8% of the profits is $430 million a year for the next 30 years. Over a shorter time horizon, the number goes up. Of course, I've never seen a discount rate that low out here in corporate America, either. The number goes up if we assume a higher discount rate, too. Figure the odds of that happening. I'm not even going to try because I'm well aware of the computational limits of my machine and software.
Now, keep in mind I got my engineering and business degrees from state school here in Texas, so I might not be up to the minute on the fancy financial thinking emanating from DC. All I can see from out here in the sticks is we, as unwilling taxpayers, are getting shafted to benefit somebody else. If I can figure this out, surely your beneficient elected leaders in DC have someone around who has noticed as well. So they must not give a rat's ass. Yay!
Short answer: all the rest of us taxpayers just got screwed to benefit the UAW and some Italians. Hope and change my pasty white ass.
posted by T at 1:34 PM
0 Comments:
Post a Comment
<< Home