Karl Rove's calculator is out of whack

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Let us make one thing clear amid the maelstrom of sound and fury over Chrysler Group's "Halftime in America" Super Bowl Ad:

Chrysler Group LLC, as it exists today, owes the U.S. government, the Canadian government and the Ontario provincial government its eternal gratitude for helping it emerge from bankruptcy in 2009 -- but it owes them not one thin dime.

One of the biggest critics of the ad, Karl Rove -- the chief political adviser to former President George W. Bush, who affectionately called him "Turd Blossom" -- knows this well.

In fact, the $1.3 billion that taxpayers did arguably lose on the 2009 bailout of then Chrysler LLC was money that came from the Bush administration.

But, like other unpaid debts of Chrysler LLC, that $1.3 billion became an outstanding liability of OldCarCo, the name given to the assets of Chrysler LLC that were not sold to Chrysler Group LLC in 2009 as it emerged from bankruptcy.

Those OldCarCo assets -- including the 70-acre site of the former Jeep Parkway plant in Toledo that was sold to the Toledo Lucas County Port Authority, and the Sterling Heights Assembly plant that was later purchased by Chrysler Group LLC -- are being sold off to satisfy the unpaid debts of OldCarCo.

The sales will never satisfy OldCarCo's debts in full -- and investors and lenders and taxpayers took a huge haircut on the deal. That's not even to mention the 789 Chrysler dealers who lost their franchises during the most tumultuous period in the history of the domestic automotive industry. Their heads weren't sheared or shaved -- they were removed.

But today's Chrysler Group LLC is legally no more liable for the unpaid debts of OldCarCo -- including the $1.3 billion in TARP funds awarded by the Bush administration -- than is Ford Motor Co., or Microsoft Corp., or Google Inc., or any other completely unassociated company or individual.

Even if Chrysler Group LLC wanted to give taxpayers a check for $1.3 billion, it can't.

Doing so would create a link between OldCarCo and Chrysler Group LLC -- in essence giving evidence to creditors that the two are one in the same company. Doing so potentially would put Chrysler Group LLC on the hook for every penny that every investor lost when Chrysler LLC collapsed in 2009.

It would put newly profitable Chrysler Group LLC immediately into bankruptcy, likely drag much of the rest of the industry back into Chapter 11, and bring the curtain down on what has been one of the greatest industry comeback stories in generations.

Like it or not, the United States is a nation of laws, and aspects of Chrysler LLC's bankruptcy case, which were rebuffed from consideration by the U.S. Supreme Court, are now settled law.

Those who would misuse Chrysler Group's stirring Super Bowl ad to advance their outside interests are like Shakespeare's Macbeth, anguishing over the realization that his ambition is fleeting:

Life's but a walking shadow, a poor player,

That struts and frets his hour upon the stage,

And then is heard no more. It is a tale

Told by an idiot, full of sound and fury,

Signifying nothing.

You can reach Larry P. Vellequette at lvellequette@crain.com.

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