Chrysler Needs $5 Billion More -

[Anonymous]

so corporations are on perpetual welfare for life support. $25 billion, $15 billion, $5 billion, ... these are just installments to be paid in perpetuity. I say let them tank.

http://news.yahoo.com/s/ap/20090217/ap_on_bi_ge/autos_bailout

[jsteele]

In Chrysler's case, I agree. They are owned by a private equity firm. US tax payers don't need to be in the business of bailing out vulture capitalists. GM is a different story, but Chrysler should be closed down.

[Anonymous]

Curious why Chrysler is different? Just because there are fewer shareholders? Is that the criteria, not how many people would lose their jobs if they closed?


Not enthused by any bailouts, just trying to understand the distinction.

[jsteele]

Anonymous wrote:Curious why Chrysler is different? Just because there are fewer shareholders? Is that the criteria, not how many people would lose their jobs if they closed?

Chrysler is owned by Cerberus, a private equity firm that has $24 billion in assets. Cerberus should inject its own capital in to Chrysler rather than asking US taxpayers.

Other reasons that Chrysler is different than GM:

1) fewer jobs involved;
2) poor product line which makes it very difficult to save Chrysler -- the few good products (Jeeps, Dodge Trucks, etc.) can be rolled into other manufacturers.
3) Chrysler's partnership with FIAT suggests a bailout would primarily benefit a foreign corporation.

[Anonymous]

jsteele wrote:

Anonymous wrote:Curious why Chrysler is different? Just because there are fewer shareholders? Is that the criteria, not how many people would lose their jobs if they closed?

Chrysler is owned by Cerberus, a private equity firm that has $24 billion in assets. Cerberus should inject its own capital in to Chrysler rather than asking US taxpayers.

Other reasons that Chrysler is different than GM:

1) fewer jobs involved;
2) poor product line which makes it very difficult to save Chrysler -- the few good products (Jeeps, Dodge Trucks, etc.) can be rolled into other manufacturers.
3) Chrysler's partnership with FIAT suggests a bailout would primarily benefit a foreign corporation.

I thought the investors were holding out for the Union workers to cut some of their nicely padded benefits (is this really a time for beggars to be choosy?), but the Union won't budge until the investors are willing to inject more. A wicked cycle of catch-22. It may be a lose-lose situation for everyone if nobody "gives in".

[jsteele]

Anonymous wrote:
I thought the investors were holding out for the Union workers to cut some of their nicely padded benefits (is this really a time for beggars to be choosy?), but the Union won't budge until the investors are willing to inject more. A wicked cycle of catch-22. It may be a lose-lose situation for everyone if nobody "gives in".

While I know it is stylish to blame all of Detroit's problems on the UAW, this is really a red herring. Bob Nardelli was asked why Cerberus didn't invest some of its billions during his recent Congressional testimony. He said Cerberus had fiduciary obligations to its investors. In other words, Cerberus isn't willing to risk its own money, but is happy to risk the US taxpayers' money.

Chrysler and GM were required to renegotiate their labor contracts as part of the loans that Bush provided. It was announced today that a tentative agreement with the UAW had been achieved. Don't hold your breath waiting for Cerberus to open its wallet.

[Anonymous]

I have to agree with Steele on this one. Cerebus needs to inject more capital if it wants to save the company.