Chrysler bankrupt (rumor)

[nogohawk]

Is it just me or do Chrysler products (when starting) sound like Dino barking on the Flintstones?

[Savage Beatings]

I've always heard terrible things about Fiat... but now I'm curious, are there any decent Fiat vehicles that will become available in the U.S. after bankrupcty and re-organizations (assuming the deal with Fiat goes through)?

 

While I don't really care for Chryslers at all, I do like Dodge and Jeep.

[Ursa Majoris]

are there any decent Fiat vehicles that will become available in the U.S. after bankrupcty and re-organizations (assuming the deal with Fiat goes through)?

Worst vehicle in Europe now that Trabant and Yugo have wound it up.

[AtomicCEO]

I've always heard terrible things about Fiat... but now I'm curious, are there any decent Fiat vehicles that will become available in the U.S. after bankrupcty and re-organizations (assuming the deal with Fiat goes through)?

 

While I don't really care for Chryslers at all, I do like Dodge and Jeep.

 

Fiat also owns Ferrari, Maserati, and Alfa Romeo.

[driveby]

Would you buy a car from Obama?

[westvirginia]

'I'm saying that when the president does it that means it's not illegal"

 

That's gonna leave a mark... Gotta love rule by executive fiat...

[driveby]

These proposed restructurings are power grabs, pure and simple. The positions of lenders are eviscerated to give control to the union trust and the government. The emergent companies are given market preference through taxpayer financing and government warrantee guarantees. All to serve no true national purpose.

 

No big deal apparently

[westvirginia]

Is everyone who voted for the obamessiah really ready to give him a pass on this one? He's trying to use his position of fedgov power to circumvent the law and reward his constituency (UAW) over the people who should legally be getting this money. He pretty much publicly threatened them. This is the essence of government corruption here folks. It's tit-for-tat political graft. Why aren't more people up in arms over this?

[driveby]

Gangster government

 

Still nothing?

 

[Perchoutofwater]

Is everyone who voted for the obamessiah really ready to give him a pass on this one? He's trying to use his position of fedgov power to circumvent the law and reward his constituency (UAW) over the people who should legally be getting this money. He pretty much publicly threatened them. This is the essence of government corruption here folks. It's tit-for-tat political graft. Why aren't more people up in arms over this?

 

Apparently so. Don't you know you aren't supposed to speak up against you or the left will try to marginalize you instead of respond to the point you bring up. Be careful.

[Perchoutofwater]

White House puts UAW ahead of property rights

By: Michael Barone

Senior Political Analyst

05/05/09 7:11 PM

Chrysler headquarters is shown in Auburn Hills, Mich., Wednesday April 29, 2009. (AP Photo/Paul Sancya)

 

Last Friday, the day after Chrysler filed for bankruptcy, I drove past the company’s headquarters on Interstate 75 in Auburn Hills, Mich.

 

As I glanced at the pentagram logo I felt myself tearing up a little bit. Anyone who grew up in the Detroit area, as I did, can’t help but be sad to see a once great company fail.

 

But my sadness turned to anger later when I heard what bankruptcy lawyer Tom Lauria said on a WJR talk show that morning. “One of my clients,” Lauria told host Frank Beckmann, “was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.”

 

Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.

 

This of course is a violation of one of the basic principles of bankruptcy law, which is that secured creditors — those who lended money only on the contractual promise that if the debt was unpaid they’d get specific property back — get paid off in full before unsecured creditors get anything. Perella Weinberg withdrew its objection to the settlement, but other bondholders did not, which triggered the bankruptcy filing.

 

After that came a denunciation of the objecting bondholders as “speculators” by Barack Obama in his news conference last Thursday. And then death threats to bondholders from parties unknown.

 

The White House denied that it strong-armed Perella Weinberg. The firm issued a statement saying it decided to accept the settlement, but it pointedly did not deny that it had been threatened by the White House. Which is to say, the threat worked.

 

The same goes for big banks that have received billions in government Troubled Asset Relief Program money. Many of them want to give back the money, but the government won’t let them. They also voted to accept the Chrysler settlement. Nice little bank ya got there, wouldn’t want anything to happen to it.

Left-wing bloggers have been saying that the White House’s denial of making threats should be taken at face value and that Lauria’s statement is not evidence to the contrary. But that’s ridiculous. Lauria is a reputable lawyer and a contributor to Democratic candidates. He has no motive to lie. The White House does.

 

Think carefully about what’s happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, is seeking to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party. The only possible limit on the White House’s power is the bankruptcy judge, who might not go along.

 

Michigan politicians of both parties joined Obama in denouncing the holdout bondholders. They point to the sad plight of UAW retirees not getting full payment of the health care benefits the union negotiated with Chrysler. But the plight of the beneficiaries of the pension funds represented by the bondholders is sad too. Ordinarily you would expect these claims to be weighed and determined by the rule of law. But not apparently in this administration.

 

Obama’s attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants “someone who understands justice is not just about some abstract legal theory,” he said, but someone who has “empathy.” In other words, judges should decide cases so that the right people win, not according to the rule of law.

The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism and crony capitalism. There’s a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of Gangster Government. It is likely to be part of a continuing series.

[bpwallace49]

Just another example of politicians taking care of their own. Despicable.

 

A little less indirect than GWB's family ties to the King of Saudi Arabia and Cheney's conflict of interest with halliburton getting a 2 billion dollar no-bid contract that he receives deffed compensation from . . . . but still extremely shady.

 

Whan will politicians realise that in the new age of information a lot of this stuff cant be covered up anymore?

 

Or maybe they just dont care because they are "above the law". Nothing has (or ever will) be done to Bush administration officials for blatent constitutional breaches, and I doubt anything will be done about supposed offenses by this administartion either.

 

Even though Obama will not receive any personal gratification for this (unlike Bush and Cheney) it just doesnt pass the smell test . . . .

[Azazello1313]

 

How Do I Know That the Chrysler Bailouts are About the Unions?

06 May 2009 03:39 pm

 

This question was asked recently by a seasoned political reporter of my acquaintance. Frankly, I hadn't realized that anyone else seriously believed there was any other reason to bail out Chrysler. But let's go through a couple of the other stated rationales, to see why I find them so implausible:

 

 

Chrysler is a good company caught in a bad situation. Chrysler has been a bad headache for years. Daimler bought it for $36 billion in 1998, and actually paid $650 million to have Cerebrus take the company off their hands in 2007. Robert Bruner said in 2007 that

 

 

The alternative to a private-equity restructuring would be a government bailout. We as an investing public need to decide whether we want the public sector to step in to support these ailing manufacturers or would we rather have these turnarounds privatized." Chrysler's major problems were not born out of the financial crisis.

 

 

The hedge funds benefited from the government money, so they're getting more than they would have otherwise. As far as I know, Chrysler has burned basically all the cash they got from the government, which is why they're in bankruptcy. They haven't bought exciting new assets the secureds can liquidate; they've just produced more cars that can't be sold at a profit, put more wear and tear on machinery, etc. The deal they made with Fiat doesn't put any cash into the company. It's possible the government money somehow improved Chrysler's current financial hopes, but I don't see it.

 

The administration isn't kowtowing to the unions; it's trying to prevent massive job loss. Chrysler employs about 60,000 people. This is a rounding error in the number of jobs that have been lost since this recession began.

 

To put it another way, we could have taken the $8 billion or so we gave to Chrysler and given every one of the company's employees $133,000 to start their own War on Poverty, while still providing much of their pensions through the PBGC. Of cours, the new Chrysler is going to cut many of those jobs, so the cost of actual jobs saved will probably top $200K per. For as long as the company lasts. Which most analysts do not expect to be long, given that their super secret surprise scheme for turning everything around is to have Chrysler sell retooled Fiats to a country with one-seventh the population density and almost twice the birthrate of Italy.

 

 

They're bailing out Chrysler because the company is systemically important.

Really? When Lehman failed, huge other portions of the financial system quite unexpectedly quit working. Yet when I look out on the streets, I see no noticeable dimunition of the number of cars there. When I turn the ignition key in my car, it still starts.

 

Whether or not you agree with the actions the government has taken in the banking system, there is evidence that financial crises have real, nasty, systemic effects that even large industrial failures don't--particularly in a well-diversified economy like the United States. (If Nokia went belly up, Finland would be in trouble. But if Nokia went belly-up, Finland probably wouldn't have the scratch to bail it out, either). I am unaware of any evidence that a single industrial failure has ever precipitated the kind of massive, widespread hardship that followed, say, the failure of Jay Cooke & Co. Intervening to prop up a company that has been struggling for a decade is almost textbook bad economic policy.

 

[driveby]

UAW's only GOP Senate donation last cycle: Arlen Specter

By: Timothy P. Carney

Examiner Columnist

05/06/09 6:32 AM

President Obama wants to make the United Auto Workers union the 55 percent owner of Chrysler. In that light, it's worth looking at the UAW's political activity.

 

As usual, in the 2008 election cycle the United Auto Workers' PAC gave 99% of its campaign contributions to Democrats. As I mention in my K Street column today, the PAC funded 42 Senate candidates, 41 of them Democrats. The other? Arlen Specter.

 

From the Center for Responsive Politics' website OpenSecrets.org, here's some data on the UAW's PAC activity in 2008:

 

* The PAC spent $ 13.1 million, making it the #14 PAC in the country, and placing it ahead of all business PACs except for the National Association of Realtors

 

* $4.9 million in reported independent expenditures, all of it dedicated to helping elect Barack Obama

 

* More than $2 million in direct contributions to candidates, with 99% of it going to Democrats

[Perchoutofwater]

Who cares if we screw a few risky speculators.

[Azazello1313]

Obama Gives UAW 55% Control Over Chrysler; UAW Negotiations With Itself Go Smoothly

 

The UAW is confident its current strategy of driving the company into the ground and demanding more taxpayer money to compensate for its losses will continue to be a winning strategy for Chrysler.

 

“If the taxpayer ain’t broke when we’re broke, don’t fix it,” said one UAW negotiator.

 

[Perchoutofwater]

I liked the way Obama painted the bond holders as risky speculators who deserved to lose their legal claim on Chrysler's assets. Now we find out that some of those risky speculators were a pension funds for school teachers. Unfortunately it doesn't appear as though anyone that voted for the Obamanation is concerned with this.

Edited May 21, 2009 by Perchoutofwater