White House Plans Bankruptcy For Chrysler
General Motors may be putting their many brands on the chopping block, but things are infinitely worse over at Chrysler. The White House announced today that Chrysler LLC will be forced into bankruptcy protection. President Barack Obama is still scheduled to make an official announcement regarding a signed deal between Chrysler and Fiat, so stay tuned for more details.
An administration official told The Detroit News, "Their [Chrysler's] failure to act in their own economic interest or the national interest does not diminish the accomplishments made by Chrysler, Fiat, and its stake-holders, nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward." Chrysler's original restructuring plan was not accepted by the government and after failure to come up with something more substantial, it looks like bankruptcy is the best option for the American automaker.
We'll keep you posted as more details emerge.
+ The Detroit News: White House plans bankruptcy for Chrysler as talks fail
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Comments
chartguy
So the billions that taxpayers poured into Chrysler have been wasted.
The bondholders are being intimidated. They're the ones who should be first in the creditor line, but Obama has put the UAW in front of them, granting them 55% ownership of Chrysler. The billions have become a transfer payment to the UAW, probably in gratitude for all the campaign donations.
The unionized school system does not teach much history anymore, but for those that did learn, look at Juan Peron in Argentina. He nationalized the banks first, then the major businesses. It ended in economic disaster for a country that had grown to be an economic power by 1929. This appears to be the roadmap that the current administration is using.
JohnD
I highly doubt that.
chartguy
What do you doubt? That the UAW, a secondary creditor, has been pushed ahead of the primary creditors, and given ownership of 55% of Chrysler?
Read it and weep:http://online.wsj.com/article/SB124113484242375207.html
Sydney
JohnD Yea, exactly what do you doubt? History? You're displaying the same kind of logic "or "lack thereof" that got this fascist muslim elected with no experience in anything except Illegal voter registration (ACORN general consul) and a masters degree in Chicago thug politics. It all emotional with you people isn't it? Facts and truth don't matter. You can't seem to believe that a president and an administration would go so far as to "nationalize "private industry and seek control over everything in our lives. "He's doing it for our own good don't you understand?" America is basically evil and we need someone to equalize things and make life fair for everyone right? Isn't that what you learned in kindergarten? You just can't believe that you've been lied to and completely fooled. "Oh no, not ME -I'm too smart for that to happen" The POTUS fired the president of GM! WTF?! No one would have believed 6 months ago that headline would be seen in the United States of America. Democrats have had control over everything including ALL spending since they took control of congress in 2007. It's not Bush who wrote the laws- it's your precious "thoughful" and "caring" democrats that have flipped the bird to all things American. Screw the Constitution right John? JohnD -you fool Don't worry though, John. You're in the majority -all 52% of you idiots that wanted to feel good about electing a black man (and that's exactly what it was about.) I certainly hope you feel good -because the people that have bee crushed by this Democrat economy feel great too. Stock market in Nov. 2006 BEFORE Democrats elected to congress 12,157 -stock market today after Obama and Democrats have had their way is 8,410. Unemployment with Republican control (before Democrats in 2007) was 4.6% Now unemployment today is 9% and over 10% in California!!! -Those are called facts John (I'm sure you "doubt" that, though) Maybe you and Al Gore would like to consult various financial advisors and come up with a different "consensus" about the figures though. Something that I'm sure will make you feel better about things - and that's what it's all about for you isn't it -feeling good
Mark in Maine
Chartguy, I don't think that the Obama Administration has a roadmap - I believe they're winging it - I do know one thing, though - I am one consumer who's finished with both Chrysler and GM. I will not purchase a product from either company again, due to fact that the Federal Government and the UAW are now in the car business . . .
chartguy
Unfortunately, your tax dollars will be subsidizing them for years to come.
Mark in Maine
Yah, no argument there - I'm not looking forward where either company is going to go from here. I also agree that the bondholders got the short end of the stick in both cases. It stinks of politics and favouritism to me. Your example of Peron is a good one. One wonders what will happen once the Fed decides that small, hybrid/electric/?/tuna cans are the thing to build, while GM/UAW will still want to produce what the buyers want - vehicles GM can sell for a profit . . .
Ducati Minor
Anyone watch Autoline After Hours? There was a huge brawl over this very issue with Robert Farago of The Truth about Cars duking it out with Jason Vines and Peter DeLorenzo. Like DeLorenzo said at the start: I've got nothing. There's too much to comment on with this topic.
I'm more concerned with where Next Autos is going. It's getting more stale here than a piece of month-old bread. I know the traffic is dropping. There's gotta be somebody who can rejuvenate Winding Road.
Anonymous
Judging by the comments, I'm not alone in being nearly terrified by Obama's insistence on running businesses he knows nothing about. Since when should the government decide whether a company has its best interests at heart? And how in the world does the UAW - one of the biggest reasons for our inability to compete in a global auto market - earn essential ownership of the company?! Someone once said Obama was intentionally crashing our economy so he could swoop in as some economic savior and "save" everything; schools, banking, big business, by Federalizing everything. I brushed it off as conspiracy theorism at the time, but man, I'm seeing some big, bad results on the horizon for some of these decisions.
Anonymous
Let's face it. Obama will have everyone bankrupt by the time he's done! (Oops, I meant to say sharing the wealth.) It's his surest method of socialism for the whole country. You always go after the deep pockets first!!! Hitler & the VW live again!!! Sorry if I offended anyone (actually I'm not, that's "political correctness"). Just read your history & tell me if I'm wrong, and consider the ramifications of how many 1000's of people will be out of work due to governmental knee jerk reactions these actions will result in. Free enterprise is what our country was founded on, let these companies rise & fall on their own. Keep Uncle Sam out of G.M. Chrysler & Ford. They all offer a fine product as do some of the foreign mfg'rs with a substantial investment in our economy.
Anything that is conceived to be free (a bailout) is the most expensive way to go, just wait until our tax bills arrive! Oh well, then we'll all own or own share of them, won't we.
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