I am not the Jackass Whisperer.
bout damned time
I don't blame the bondholders for rejecting the deal. Bondholders aren't speculators. They made a loan to Chrysler that Chrysler promised to pay. (Hence the term "bond.")
Treasury wanted them to settle for less than the principal in the bond. That's crazy, and terrible policy. Why would anyone lend money -- buy a bond -- if Treasury might swoop in and impose such a crappy settlement? And how is the economy supposed to get going again if no one is willing to lend?
So whatever happened with Cerberus, the investment co. that took Chrysler private? Their name is curiously missing from all three of the Chrysler stories in today's NY Times.
We used to make ships, trains, clothes,
It's nice and all to wish death to horrible mismanaged companies.
But this ain't Starbucks.
**** like can permanently cripple our ability to produce anything like this ever again.
If you can't keep the factory running it closes and never reopens.
If two of the three close... well we may see "made in china" on yet another item we use daily.
DO you Republicans/Fiscal Conservative/etc see this? I'm wondering.
TOKYO (AP) -- Japanese automakers reacted with anxiety to news that ailing U.S. automakers General Motors and Chrysler had failed to submit acceptable plans to receive more government money, increasing the odds they may have to file for bankruptcy protection. The news also weighed on Asian stock markets.
"A healthy U.S. auto industry is in the best interests of everyone," said Alan Buddendeck, corporate vice president of global communications at Nissan Motor Co., Japan's third-biggest carmaker. He declined comment specifically on GM's woes, but expressed hopes for a recovery.
Nissan, Toyota and other Japanese automakers have repeatedly said the collapse of any major U.S. car maker would hurt them in their critical North American business because they share the same parts suppliers such as Delphi Corp., Bosch Auto Parts and TRW Automotive.
In recent years, the Japanese have expanded in the U.S., making one of the world's biggest auto markets a cornerstone of their growth strategy. By growing more American, they have become such a part of the U.S. industrial landscape that the collapse of any of Detroit's Big Three would be a blow to the Japanese manufacturers.
Detroit's Big Three versus Japanese Automakers
It's not as simple as let them die.
Every company that makes a product that people want to buy at a price they want to pay should continue operating as long as it wants. If the government saddles such an industry with Wagner Act unionism and unsustainable dealer franchise rules, then it's not going to survive. But response from the Congress and the administration is to expand reach of Wagner Act unionism, force bondholders to take a huge loss and leave the dealer franchise rules in place. Just because the government is offering no other option doesn't mean I have to support the one they're offering.
Bondholders get paid first -- at 100 percent -- before anyone else. Bondholders get this security in exchange for a very low rate of return. As a huge concession to help Chrysler, they've offered to take only 50 percent up front and subject the rest to the same process as the junior creditors will face.
None of this will reduce the massive cost when Chrysler -- for the most part -- finally gives up the ghost. (GM, for example, may want to buy Jeep.) But it will leave us with fewer resources to deal with it when it happens, as it almost certainly will.
Fiat came back from the dead. Apple survived countless death sentences. Even the French government was able to put together a world-beating Aeroplane company. Business doesn't always do what you think it is supposed to do.