Commentary: Chrysler secrecy is a big stick

Chrysler LLC's got a confusing Canada complex.

In testimony before a parliamentary committee, Vice Chairman Tom LaSorda threatened to shutter Chrysler's three plants there unless it can cut labor costs, secure an $800 million loan from the government and resolve a nagging tax problem worth some $335 million to the struggling automaker.

"Failure to satisfactorily resolve these three factors will place our Canadian manufacturing operations at a significant disadvantage relative to our manufacturing operations in North America and may very well impair our ability to continue to produce," LaSorda told the automotive subcommittee of the House of Commons in Ottawa.

Brinksmanship by a Windsor native whose father was a longtime member of the Canadian Auto Workers? You bet. That, and yet more evidence of Chrysler's penchant for using its private-company status to send mixed messages and sow confusion amid anxiety.

Just five days before LaSorda dropped the hammer on parliament, the CAW and such plant towns as Windsor, Etobicoke and Brampton, his alter ego, Vice Chairman Jim Press, said this in an internal memo:

"In Canada, we were the No. 1 selling vehicle manufacturer in February for the first time ever in our 84-year history," he wrote in an e-mail dated March 6. "Congratulations to our Canadian operations and our dealers for doing such a great job in challenging times."

Translation: Thanks for doing so well in Canada under trying circumstances. But if we don't get what we want, we'll be forced to shut it all down, to make nearby Windsor an economic ghost town and to blame the government for euthanizing 9,400 direct Chrysler jobs and thousands more at dealerships.

If nothing else, the Chrysler controlled by the shadowy Cerberus Capital Management LP of New York has shown a recurring willingness to muscle constituents reluctant to accede to its demands. Just ask Julie Brown's Plastech Engineered Products Inc., the Dearborn supplier driven into liquidation last year in a fight with Chrysler.

Could the Canadians be next? Probably not, considering rising joblessness, dismal auto sales and the fact a Chrysler pull-out would have serious repercussions for the government of Prime Minister Stephen Harper and Ontario's status as the epicenter of Canada's foreign-owned auto industry.

But the tactic? More of the same for a company whose owner won't tell the public who owns it and won't ask those investors to pump more capital into the nearly failing enterprise because that would violate Cerberus's investor guidelines.

Instead, American taxpayers -- and, now, the Canadians -- are expected to write fat checks for an automaker whose major investors could be public pension funds or Warren Buffett or sovereign wealth funds controlled by foreign governments. At least struggling General Motors Corp., its market cap whittled to $1.33 billion, is obligated to disclose the large owners of whatever equity remains.

Chrysler's got a credibility problem exacerbated by secrecy, less scrutiny and more corporate muscle. It gets a $4 billion lifeline from Treasury, launches a massive incentive program that pumps its retail market share higher and then, in Press's words, emphasizes "that no government loan money was used to fund customer incentives."

How do we know? Rival Ford Motor Co., for one, has been privately accusing Chrysler of doing just that -- using government money to drive sales that prove Chrysler's viability long enough to bank more government money and then finalize an alliance with Fiat SpA of Italy.

Not true, Chrysler says. And we'll all just have to take their word for it.

Daniel Howes' column runs Tuesdays, Thursdays and Fridays. He can be reached at (313) 222-2106, dchowes@detnews.com">dchowes@detnews.com or detnews.com/howes. Catch him Fridays with Paul W. Smith on 760-WJR.