By K.O. Jackson
As the employees of Chrysler Group LLC return this week after plants were shuttered for almost two months, apparently hard feelings still linger with Indiana Treasurer Richard Mourdock and the Auburn Hills, Mich.-automaker.
Earlier this month, Mourdock spent $2 million while fighting for three state pension funds invested in the old Chrysler, hoping the Supreme Court would stop Fiat SpA from buying Chrysler’s assets to make a new Chrysler — Chrysler Group — owned by Fiat, the UAW and the federal government.
Last year, the funds bought $42.5 million in Chrysler bonds for close to $17 million. With the bankruptcy, the bonds received 29 cents on the dollar for the $42.5 million in purchased bonds. But since the bonds were purchased at a lower rate, the price was 72 cents on a dollar, meaning the funds would get back $12.2 million of the $17 million it invested.
Simply, the funds would lose about $5 million. That loss — combined with unsecured creditors getting a better deal than secured creditors — was one reason Mourdock fought the Chrysler sale.
Although Gov. Mitch Daniels said Mourdock was “doing his duty ... it was one of the most principled and gutsy things I’ve ever seen an elected official do in a long time,” Supreme Court Justice Ruth Bader Ginsberg allowed the sale to continue.
“I am disappointed to have learned the U.S. Supreme Court has lifted the stay in the Chrysler bankruptcy case thereby allowing the company to be acquired by the United States government so it may distribute its assets as it directs,” said Mourdock after Ginsberg’s decision. “I have fought for Indiana’s retired teachers, retired state policemen, and Hoosier taxpayers. I have no regret for having done so and for having carried this case to the doorstep of the nation’s highest court
That should have been the end of the story.
Perhaps, it isn’t.
On various Web sites, including businessweek.com, there have been recent reports Mourdock — driven by principle — is against the government owning businesses.
As a result, he is considering going back after Chrysler to recoup the money Hoosiers had invested in the old Chrysler.
The businessweek.com story, “Indiana funds may not be done with Chrysler,” was written by David Welch, the Detroit bureau chief for BusinessWeek. Before joining the organization, he was an auto writer for The Detroit News.
Although Mourdock’s attempt to stop the sale failed, Welch’s story says, “the Indiana pension funds that went all the way to the Supreme Court ... might be back again. Indiana Treasurer Richard Mourdock is mulling legal action to get the nation’s highest court to rule whether the sale — which was finalized in bankruptcy court on June 10 — was valid. The funds hope that the court will either overturn the sale or force the new Chrysler to pay secured creditors such as the Indiana pension plans some more money ...”
Furthermore, in a telephone interview, Welch said Mourdock’s attorney may be more adamant about filing a case against Chrysler than Mourdock is. Regardless, “I know [Mourdock’s] taken a lot of heat from this. I didn’t write that they would file, only that they were mulling it over. He’s seems to be doing some back-peddling and damage control.”
Nevertheless, according to Mourdock’s spokesman, Welch’s story may be the furthest thing from the truth.
“We know about the interview and it was a bunch of ‘if this,’ ‘if that,’ scenarios,” said Mourdock’s spokesman Christopher Conner. “It was never anything meant to be published and we are surprised it has been circulated. But you can’t put the horse back in the barn after it is out.
“It is Treasurer Mourdock’s fiduciary responsibility to look at all options. But nothing official has been decided. [Welch’s story is] not true. I am surprised this came out.”
In his mind, the case and story is closed, said Rich Boruff, president of UAW Local 685.
As Chrysler’s largest workforce, Boruff still can’t comprehend Mourdock’s motive of wanting to close Kokomo’s largest employer. And if Mourdock plans to try it again, Boruff still doesn’t “understand his motive.
“Why would he want to put everyone into jeopardy and impact all of us economically? The guy is a fool,” said Boruff. “I know some of those pension funds are government, so maybe that is what is driving him. But it doesn’t make any sense at all.
“Look at the [Indiana] Honda plant. It’s non union and the state government fought like crazy for them. Why don’t they fight for us to retain what we all ready have? What has the state done for us? We have Chrysler’s largest workforce in the entire Chrysler structure and our state is the only one that has to be the jackass. It doesn’t make any sense.”
• K.O. Jackson is the Tribune’s business writer. He can be reached at (765) 854-6739 or via e-mail kirven.jackson@kokomotribune.com
