By on June 3, 2011

Fiat has reached an agreement with the U.S. Government that will give Fiat 52 percent of the shares in Chrysler and therefore the final controlling majorioty. The Treasury said on Thursday it will sell its remaining 6 percent equity stake in Chrysler to Italy’s Fiat in a deal that will net Washington $560 million, Reuters reports.

According to a statement of the Department of the Treasury, “The expected total proceeds to Treasury from this transaction are $560 million. Fiat agreed to pay Treasury $500 million for Treasury’s 98,461 shares of Chrysler. Treasury also held the right to proceeds above a certain threshold received by the UAW retiree trust from the trust’s sale of Chrysler equity, as well as a right to purchase all of the shares retained by the UAW retiree trust for a certain threshold amount – which Fiat will purchase for $75 million. Treasury will receive 80 percent of the proceeds ($60 million) from that $75 million, while the Government of Canada will receive 20 percent of the proceeds ($15 million).

Got that?

The Obama administration invested $12.5 billion in Chrysler. Chrysler will have returned more than US$11.2bn of that amount to taxpayers through principal repayments, interest, and cancelled commitments.

“Treasury is unlikely to fully recover the difference of $1.3 billion,” the government statement said.

 

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74 Comments on “Forza Italia: Fiat Takes Control Of Chrysler, Gummint Gone...”


  • avatar
    gslippy

    I’ll concede the $1.3 billion as a job-savings cost, and thank Fiat for closing the rest of the gap. Well done.

    OK, GM, you’re next.

    • 0 avatar
      SVX pearlie

      $1.3 Bn bought a lot of UAW votes…

    • 0 avatar

      The U.S. and Canadian governments will easily recoup their losses in the form of income tax payments. If GM and Chrysler had gone under they’d be paying tens of thousands of workers unemployment compensation rather than receiving tax revenue from them. This was a major component of the Task Force’s cost-benefit analysis.

      • 0 avatar
        SVX pearlie

        That pretends that all of the GM & Chrysler production and demand simply *VANISHES* into nothingness. Primarily GM.

        In reality, if Chrysler had folded, GM & Ford, etc. would have seen additional sales to replace lost Chrysler demand. Many ex-Chrysler workers would have been absorbed by GM & Ford and the rest. The morons at the top would be out of a job, along with the workers who aren’t as good.

        Economically, that’s not such a bad thing.

      • 0 avatar
        FleetofWheel

        You are making the assumption that prospective new GM/Chrysler car buyers would simply not buy any car if they couldn’t get their preferred brand.

        Eventually, most would have bought another brand of vehicle and the govt then receive tax revenue from those sales, parts and service.

        And of course, those other car makers would have to hire more workers to produce cars for all those captured GM/Chrysler sales.

        Just like every manufacturer of a staple product that has gone out of business, some other company is now making those sales with tax revenue and employment in kind.

      • 0 avatar
        jkross22

        “The U.S. and Canadian governments will easily recoup their losses in the form of income tax payments.”

        Did Chrysler carry over losses from ‘bad Chrysler’ to New Chrysler the way GM did? If so, they have years of tax offsets before Chrysler will pay a nickel in income tax.

      • 0 avatar
        aristurtle

        He’s referring to workers’ wages, not Chrysler’s corporate income tax; the US tax code is generally set up in a way that allows any large corporation with a usually-sober accountant to zero out their taxes.

    • 0 avatar
      highdesertcat

      Well, a loss is still a loss. At least we, the people, got most of the money back that we gave Chrysler to keep the lights on. Maybe the Chrysler fans can now agree with the rest of us that Chrysler is no more and that what was formerly Chrysler is now Fiatsler, and a foreign-owned company. So, to keep in tradition with all the foreign bashers who criticize Americans for buying foreign products made in America, will they now also include Fiatsler?

  • avatar

    Not a bad deal gubbamint got rid of Chrysler and nearly all its money back

  • avatar
    johnny ro

    I remember thinking it could all be lost.

    The bailout was the single thing that Bush’s administration did that I agreed with. He surprised me with that. Not sure he was actually in the loop though. Didn’t read his book.

    • 0 avatar
      aristurtle

      The (relatively) small TARP loans that Bush gave to GM and Chrysler were just enough to kick the problem to the next administration.

      I can’t really blame him, though; it’s what I probably would have done.

      • 0 avatar
        SVX pearlie

        exactly. Bush punted.

      • 0 avatar
        toxicroach

        I always felt like Bush punted out of courtesy to Obama. It’s not like he should be making major policy decisions when he was going to be out of office in two months.

        And to be fair to Obama, at least so far the bailouts have not been the nightmarish disaster I thought they would be. Having very very friendly bankruptcy judges can fix a lot of problems.

    • 0 avatar
      Patrickj

      That’s all right. Bush probably hasn’t read his book either.

      • 0 avatar
        windswords

        That would be Obama, he didn’t even write his book.

      • 0 avatar
        MikeAR

        Patrick, very clever, bet you are a lot less well read than Bush. You do know he hasn’t been Preseident for over two years now, don’t you? You’re really cutting edge. I bet you gripe about that new-fangled fuel injection too.

      • 0 avatar
        caljn

        Mikear: I can’t believe this must be said, but that he has been out of office for two years does not magically erase the litany of problems created on his watch.

      • 0 avatar
        windswords

        In 2 1/2 years, BO has created more of mess than W did in 8. And it really didn’t fall apart until 2007 after congress went to the other party in the mid terms. Today Moody’s warned they will downgrade the US debt obligations if they don’t get serious about cutting runaway spending.

      • 0 avatar
        aristurtle

        Moody’s, that’s that ratings agency that rated “virtual CDO subprime tranches” that were composed entirely of bullshit as AAA investment-grade material, right? Or am I thinking of Standard & Poore? Or Finch? Oh, no, wait, it was all three.

      • 0 avatar
        MikeAR

        Caljin, my problem is that just how long are you guys going to fall back on that excuse? You can’t say anything positive about the telepromter so you go all juvenile on Bush.

        One more thing, Bush by your measure was stupid. Ok, I’ll go along with you for a while with that. But he became President. You aren’t President, so by your standards you must be even less intelligent than him. We still in agreement there?

      • 0 avatar
        MoppyMop

        One more thing, Bush by your measure was stupid. Ok, I’ll go along with you for a while with that. But he became President. You aren’t President, so by your standards you must be even less intelligent than him. We still in agreement there?

        You’re not the president either, so by this “logic” you are less intelligent than the “teleprompter” you so despise.

      • 0 avatar
        MikeAR

        That you best you can do? Pretty elemantary school of you. I didn’t insinute that nayone was stupid, your guy did. After all that’s all you can do, insult people who can’t or won’t respond. You have nothing else to offer and aren’t able to argue your side on merit, so you insult. The American left, spoiled children.

      • 0 avatar
        MoppyMop

        In other words, “no u” is all you’ve got. Pretty weak stuff, but what should we expect from a guy who can’t even spell “elementary”?

      • 0 avatar
        caljn

        Where to begin…
        Windswords-what mess did BHO create that we are dealing with now? Please, be specific. He put Shrub’s illegal wars on the books that dramatically ran up the debt.
        When BHO tries to effect any kind of change the low info types yell SOCIALISM! They prefer to stick to their discredited idelology rather than help people. He did not create the mess we’re in, he inherited it and yes it will take quite awhile to fix things.

        mikear- you accuse others of juvenile arguments but you are nearly saying na na na na na in each of your posts.
        Go look up when the telepromter was invented.

        Bush cut taxes in the middle of the night and had no net increase in jobs in his two terms. He started two wars and medicare part d and didn’t pay for them. They intended to starve the govt and they did…and now we are paying the consequences.
        Things will improve when Shrub’s tax cuts expire.

        Can we all finally agree middle class prosperity ended with Reagan? Tax cuts do not create jobs and don’t “trickle down”. Piss down, maybe.

      • 0 avatar
        MikeAR

        Ok, all you guys got is personal insults, you can’t argue facts and you lie. And if anyone has never misspelled anything, then you can call me out on my spelling, it’s what happens when I type without glasses and in hurry. You had better spell check everything now and grammar and puntuation had better be better than perfect cause I will point it out to you in great detail.

        Illegal wars, another lie. The actions were approved by votes in Congress, perfectly legal unlike say the current illegal war in Libya. What do you say to excuse that? Is it somehow Bush’s fault? Did he sneak in the White House one night and twist Obama’s arm to make him do it? Or did he put words in the teleprompter that Obama then said without understanding what he was saying?

        Oh by the way, who said there were 57 states? Who won’t release his transcripts or any work history, who can’t form a coherent sentence without a teleprompter. One more classic, calling a Navy Corpsman and corpseman. Yep, really a smart guy there.

        I realize that you guys are pretty history illiterate but you do realize that the reasons, if true, that there was no net job growth from 2001-09 was twofold, 9/11/01 and a major recession in Sept. 08. As long as we are using arbitrary dates to prove a stupid point, how about this: there was job growth in Bush’s terms until the recession hit at the end. And for you Democratic worshippers, job growth ended ini 07 when the Democrat’s took over the House and Senate. You’re blaming the wrong guy, blame Reid and Pelosi.

        What else can you come up with to distort and misrepresent?

      • 0 avatar
        windswords

        “Windswords-what mess did BHO create that we are dealing with now? Please, be specific”

        You kidding right?

        Ran up our debt in a way that makes Bush and any Republicans look like a rank amateurs. Now we get to have our bonds downgraded.
        Said unemployment would not go above 8% – it’s been hovering around 10% and the real rate is probably 17%.
        Bows down to foreign leaders.
        Can’t get his facts straight about a police officer’s arrest of a professor. Makes it “better” by sipping beer with those involved and has that joke of a vice president of his tag along.
        Hires unelected and unapproved “Czars” with no accountability and gives them authority over various parts of the government. One of them admits in his own words to being a communist.
        Starts a war in Libya – over what? Then he doesn’t get permission from congress to carry out this action – in direct violation of the War Powers Act (for the record, Bush got permission from congress, not once, but twice before taking military action in Iraq. So much for the “illegal” Bush wars. Obama’s is clearly illegal from start to finish.
        Gets congress to approve almost 1 trillion dollars in stimulus spending for “shovel ready” projects – except that there are none and the money is given to State governments and unions – not one dime is spent on infrastructure projects like FDR did in the 30′s. Money is flushed down the toilet.
        Refuses to enforce the nations immigration laws (something Bush did not do either). Then sues Arizona for doing the same! As a PR move he puts extra agents on the border for a few weeks – then removes them.
        Plans to try terrorist in a civil court in NYC – then changes his mind when everyone protests.
        Gitmo – didn’t close it
        Says he wants to reform health care – and then steps away from it while Harry and Nancy and their crew write a bill that guts medicare, makes people unconstitutionally have to engage in commerce, and makes sure that none of the really onerous parts of the bill go into effect until after the 2012 election. He then signs a bill that he hasn’t read (and most of congress hasn’t either).
        Directs government agencies to over regulate in a way that circumvents the proper role of Congress in debating and passing new laws, in effect regulating new laws into existence.
        While gas prices soar does nothing – because he can’t blame it on Republicans.
        While massive amounts of oil is spilling into the gulf, he plays golf – all the while his spokesman insist he is on it since “day one”.
        Spends more in first 8 months of his presidency than Bush did during his entire 2 terms in office on Iraq and Afghanistan.

        This is just off the top of my head (without using any references) and is only after 2 1/2 years. You may be young, but I remember Jimmy Carter, and this guy is far worse. Jimmy was just stupid, Obama is destructive because he believes what he is doing is right and he can’t be reasoned with. His hubris blinds him, but he couldn’t even bring the Olympics to Chicago.

      • 0 avatar
        NulloModo

        I had the misfortune the other day to be stuck in a car while the driver chose to listen to the Rush Limbaugh show. The experience made me truly sad that the level of political discourse in this country has sunken so low.

        Obama isn’t perfect, no one is, and I don’t agree with all of his policies. I believe his biggest mistake was trying to engage in bipartisan discussions with a republican faction that is unwilling to listen to reason or logic. When he had the chance to push through some real game changing legislation his first couple years with a Democratic majority in congress he instead tried to play nice with the other side of the aisle who responded by digging themselves in deeper and deeper into their ultraconservative ideology.

        Healthcare, health insurance, defense spending, infrastructure, education, and privacy rights all need major overhaul and/or reform, but instead of being able to deal with it Obama has had to waste time fending off an angry mob who is crying out to see birth certificates and trying to undo what little progress he was able to accomplish on the healthcare front.

        When it comes down to it TARP, while distasteful, was absolutely necessary. For all of the shouting about how much it cost I haven’t heard anyone come up with an explanation about how it would have been cheaper if tens or hundreds of thousands more had lost their jobs, their savings, and their mortgages. Though unemployment is still high how would things be better if it were even higher? Obama has made good on his promise not to raise taxes on the working and middle classes. The conservatives want to see the deficit go down, as does everyone really, but they won’t allow him to do what needs to be done and raise the taxes on the wealthy to pay it down.

        If fiscal conservatism is represented by Florida’s current douchebag of a governor Rick Scott, who gave away free federal money for a rail system that would have created thousands of desperately needed construction jobs, who cut funding for public schools that are barely scraping by, and who is allowing home insurance companies to jack rates up even higher on people who already pay way too much, all while cutting taxes on corporations who already make millions in profits, I want no part of it.

      • 0 avatar
        MikeAR

        You have got to be kidding, bipartisan? I won, bring a gun to a knife fight, and other thuggish putdowns of the opposition? It’s late and I don’t want to dig up anything but for God’s sake have you listened to what comes from your side? The threats, the personal attacks for policy differences, the incitements to violence, the filthy disgusting attacks on families of opponents, they all come from your side.

        You can’t even get through a post without insulting someone, calling him a douchebag, just because you don’t agree with him. Civility has to begin somewhere, why don’t you try it? Or maybe we who think your politics are evil and deserve to die? Is that what you think? Rick Scott isn’t the douchebag.

    • 0 avatar
      kowsnofskia

      Actually, I would have been far more impressed if Bush had forced a cramdown and made the automakers undergo a *real* bankruptcy. Instead, he caved and displayed what we knew all along – that he was no fiscal conservative.

      • 0 avatar
        jkross22

        +100

        A common mistake made by a lot of Dems or Libs on TTAC is that conservatives thought Bush was one of them. Midway through his first term, he revealed himself to be anything but, at least from an economic perspective.

        In fact, if we look at the increase in spending that occurred in his last 2 yrs, and what has accelerated under Obama, Obama has become Bush’s 3rd term.

        Fed deficits run:

        2008: $10 trillion
        2009: $11.8 trillion
        2010: $13.6 trillion

        No wonder the bailout defenders say what they do. “It’s just a billion. What’s the problem?”

      • 0 avatar
        MikeAR

        He was no consevative, but his biggest fault was that he was too nice to his enemies. He should have treated them as they were, traitors.

  • avatar
    Zackman

    Good news on a Friday morning.

    Hope this works out for all parties involved, although truth be told, Chrysler cars – those that survive – will soon be hybrids along with all other vehicles in the Fiat family – platform sharing – so really, obsolete and/or non-competetive platforms will be discontinued and badge-engineering will be the norm, which is O.K. by me as long as they make each model unique in its own right through suspension and powertrain tweaks along with styling.

  • avatar
    tparkit

    “Chrysler will have returned more than US$11.2bn of that amount to taxpayers through principal repayments, interest, and cancelled commitments.”

    Well, let’s start with the “cancelled commitments”:

    http://money.cnn.com/2009/05/05/news/companies/chrysler_loans/

    And as for much of the rest of the “repayment”:

    http://www.thetruthaboutcars.com/2011/04/the-chrysler-coincidence-bailout-loan-shuffle-to-help-fund-fiat-takeover/

    As usual, the UAW/auto bailout is still what it always was, and Fiat is being rewarded handsomly for rescuing the Obama administration from a political problem.

    • 0 avatar
      doctor olds

      tparkit-Your first link is over 2 years old, was a prognostication and is meaningless today! The second link erroneously conjectures that Chrysler took DOE loans for new technology to repay “bailout” loans. There, in fact, are strict requirements for how that money is to be used, and it remains a loan that must be repaid. btw- GM turned down the $14B DOE money they were eligible for.

      • 0 avatar
        tparkit

        Nice try, doc. I’ve noticed you flaks have flooded the media channels trying to make sure people don’t think past the headlines.

        The truth is, the loans are in fact “loans”, and will never actually be repaid – except by the taxpayers… just like GM’s tax credit windfall.

  • avatar
    geozinger

    I’d heard about the completion of the acquisition of Chrysler by Fiat this morning on the radio. My first thought was good; at least one of the big three has some more stability, but at the price of it’s independence.

    I thought back to the depths of carmageddon, when we all thought that the bailouts/loans/whatever you want to call it would never be paid back, or at least not very much of it. Now, no one seems to remember that the credit markets were frozen, no other legitimate entity was going to come in and “save” Chrysler (or GM). The US Govt basically gave Chrysler away to Fiat just to keep the lights on. Fortunately here we are 2+ years later and most of the money is paid back.

    I was initially concerned to learn that Fiat would be taking over the management of Chrysler, from the outside looking in, it would not be not a great matchup. Especially with the respective quality reputations of both companies, but it sounds like Fiat has improved greatly in Europe and Chrysler is doing the same here in the States.

    I hope that Fiat will be a good steward of the gift they were given and continues to keep production here in the States. Besides, I’m hoping to see some of the European models over here, as we need a new paradigm for design of small cars beyond the Asian model. Ford with it’s Fiesta and Focus have given us a good start. It looks like GM will be bringing over some variation of the Astra at some point, too. Fiat/Chrysler needs to offer some good small cars beyond the 500. Once they can plug that hole in the lineup in North America, they should be good to go.

  • avatar
    John Horner

    This is good news, and I think Fiat is on track to fully turn Chrysler around.

    Some might recall that back when this deal went down I was one of relatively few voices saying it had a good chance of working out. My reasoning then was that Marchionne had led Fiat’s turn around of the North American Chase/New-Holland agricultural equipment company (which also includes the old Ford agricultural equipment business). Oddly enough, very few “American” farmers realize that they are buying a Fiat Group product when the choose a Chase or New Holland tractor. A proven track record turning around a good sized, US based motorized equipment manufacturing company seemed like a good start for whoever was going to take on the Daimler-Cerberus Chrysler mess.

    So far, Fiat has done an excellent job with what they got. There is much, much more to be done at Chrsyler, but I’m glad the company is still around. The automotive world would be a much more boring place without Chrysler.

    That the government got the vast majority of its money back whilst keeping a large number of both direct and indirect Chrsyler employees at work and paying taxes is a very good thing.

    • 0 avatar
      MikeAR

      Agree with Aristurtle completely.

      “The automotive world would be a much more boring place without Chrysler.”

      And I agree with this completely too, good or bad, Mopars are never dull appliances. I hope they do well, they shoudl be rewarded for doing interesting cars and trucks.

  • avatar
    aristurtle

    I think there’s one thing that everyone of any political persuasion can agree on: they’ve got a hell of a better chance at success with Fiat than they had with Daimler.

  • avatar
    NN

    It wasn’t all that terribly long ago that GM owned 20% or so of Fiat and was given the option to purchase the remainder for $2 billion. I think those figures are right…feel free to correct me if I’m wrong. Fiat was nearly bankrupt. GM turned the option down and divested itself of it’s Fiat stake. This was right before Fiat released their Panda, new Punto, and then ultimately the 500…models which were all great successes in Europe and revived Fiat’s fortunes. Simply put, they invested in themselves (using some of GM’s money and resources) to strengthen their core competencies and brand. I was following their stock at the time and saw it rise from $7 or so to $30 or so. Now Fiat owns Chrysler.

    Interesting business.

    • 0 avatar
      Scoutdude

      And when Fiat tried to make GM purchase the rest of Fiat as per their agreement GM paid big bucks to get out of the deal. Which was one of the things that helped put GM in the state it was in.

    • 0 avatar

      GM paid $2 billion to avoid buying FIAT. Buying FIAT would have cost more.

      Probably Wagoner’s dumbest move. The Italians really took GM for a ride.

      • 0 avatar
        doctor olds

        Michael, GM paid $2B to get out of FIAT because their quality is far behind GM’s requirements and showed no signs of every being competitive. GM’s connection with Fiat was a Powertrain joint venture. GM ended up walking away with the diesel engine business, which had been FIAT’s. GM was supplying diesels to Honda in Europe. I don’t know if that is still true today.
        GM may have overpaid for the diesel business unit, but GM is far better off not having to take ownership of the whole company. I hope, for Chrysler’s sake, that Marchionne has made dramatic improvements in the FIAT quality story.

  • avatar
    RRocket

    So the US taxpayers are on the hook for $1.3 billion, and Chrysler is no longer a US company and is now foreign owned. If this is people’s idea of good news, I’d sure hate to read bad news….

    • 0 avatar
      Benya

      Fiat is a publicly traded company, so now anyone can choose to own a share of it if they wish, whereas Cerberus is not publicly traded. And did you forget prior to that they were “owned” by Daimler? I don’t think through all that anyone has questioned Chrysler’s nationality. It doesn’t really make sense to now either.

      • 0 avatar
        jkross22

        Benya,

        I agree. It’s not about Chrysler’s home office nationality. But if it truly is about the jobs, let’s just watch and see how many US jobs are added or moved offshore.

  • avatar
    Steve B

    Hopefully ownership by a bona fide European maker of small cars will help Chrysler in the passenger car department. They seem to do well with trucks, and their few SUVs, and their large cars seem quite popular… but the small-midsize cars? Caliber? 200/Stratus/Avenger/whatever it’s called these days? They don’t really have much there.

    Also, I wonder if Fiat will fall to the Jeep Curse.

    Bantam
    Willys
    Kaiser
    AMC
    Renault*
    Chrysler
    Diamler*
    Cerebus*
    Chrysler LLC
    Fiat.

    Any company who holds Jeep will either be swallowed, require massive outside investment to stay afloat, or *cash out to avoid being pulled under. Also funny that the greatest automotive Icon of WWII has now been owned by the French, Germans, and Italians.

  • avatar
    wmba

    Well, the US is doing very well on its Chrysler and GM loan paybacks.

    In Canada, not so much. Here’s the figures from National Post, May 30:

    “In the event, Canadian governments committed $3.7-billion to Chrysler (only $2.9-billion of which was ever disbursed). When Chrysler emerged from bankruptcy in 2009, the governments received 2% of the equity. Chrysler has now repaid $1.7-billion plus $283-million in interest. A further $1.2-billion loan was made to the old, prebankruptcy Chrysler that is unlikely to be repaid, but the government could get its money back if it sells its shares to Chrysler or in an upcoming IPO at a high enough price.

    The total package for GM was $10.8-billion in loans, of which it has repaid $1.5-billion plus $83-million in interest. When GM emerged from bankruptcy, the two Canadian governments exchanged the remainder of the loans for a combined 11.7% ownership stake, currently worth around $5.6-billion, and US$403-million of preferred shares.”

    I’m not impressed with GM or Chrysler yet, insofar as their Canadian loans are concerned.

  • avatar

    “It doesn’t matter where the vehicles are assembled, the profits go overseas.”

    Are Dodge/Chrysler owners now banned from using that old canard to malign Toyota drivers?

    • 0 avatar
      psarhjinian

      That one always made me cry. Of course the profits go overseas. Are lineworkers paid profits? How about suppliers, are they paid profits?

      Profits always go to some rich guys. What helps you and your community is where the costs go.

      • 0 avatar
        NulloModo

        Well, where the majority of the taxes are paid also makes a difference. Granted, corporations is general pay far too little tax with all of the loopholes and accounting tricks available to them, but in an ideal arrangement a US based company would create more tax revenue for the US than a Japanese or Italian based company.

  • avatar
    VanillaDude

    Remember when Americans were proud when their corporations made profits? Remember when losing a billion dollars was shameful? Remember when owning a car built and factory-owned by your fellow Americans was a source of pride?

    If your grandfather heard half the crap you blubbering babies dribble on this blog, he’s pound into your head some common sense.

    Going global doesn’t mean handing the rest of the world our balls.

    • 0 avatar
      psarhjinian

      My grandfather was a Leftist partisan (and eventual PoW) fighting Mussolini and Hitler’s forces in the towns and mountains around Turin. He’d later work for a TRW plant that supplied Chrysler.

      I think he’d be ok with this.

    • 0 avatar
      jkross22

      Dude,

      The America you’re referring to also didn’t have pay disparities that exist now, didn’t have Toyotas made in Texas and Hondas made in Ohio and GM’s made in Korea.

      Times have changed, my man.

  • avatar
    mtymsi

    No question in my mind this is a far better outcome than letting Chryco go out of business would have been.

    Today they employ tens of thousands both directly and indirectly in the U.S. Living in metro Detroit many of those employed are also my neighbors.

    From purely an economic standpoint now the bailout made sense. From an ideological standpoint there will always be those opposed but their economic argument no longer exists. Of course their ideology had no room for the economic consequences that would have been suffered by those tens of thousands of workers who are employed today because of the bailout.

    • 0 avatar
      FleetofWheel

      And to follow your ideology means that bailouts can never be refused to any large company with lots of workers and suppliers. Unthinkable.

      Under what circumstances would you let a GM or Chrysler fail? See…you can’t do it.

      Now that is a pretty wacked out economic argument and not sustainable in the mid run let along long run.

    • 0 avatar
      jkross22

      We should never let Dell go out of business either… or Apple… or Motorola…. or Sears…. Logitech….

      You’re basically in favor of the “too big too fail” model. Nice.

      The problem with government intervention like this is that it results in the government picking winners and losers. That is not the job of government.

      As has been said before, the bigger the government, the smaller the citizen.

      • 0 avatar
        mtymsi

        As I said, there will always be those that continue to think the bailouts were a mistake. Apparently the GM & Chryco bailouts were sustainable in both the mid & long term when the cost of letting both fail is factored into the equation.

        “We should never let Dell go out of business either… or Apple… or Motorola…. or Sears…. Logitech….”

        The above named companies combined do not employ directly & indirectly (suppliers) anywhere near the tens of thousands of people GM & Chryco do in the U.S. In fact, about 100% of their manufacturing is done overseas. And I strongly disagree with your assertion that it isn’t the government’s job to insure a strong manufacturing/industrial base. Apparently so does every other industrialized country’s government as evidenced by their support of their own automobile/manufacturing/industrial entities.

        You can continue to pontificate from your ivory tower endlessly. The fact of the matter is the bailouts worked and the U.S. economy is in a much better position than it would be had GM & Chryco been allowed to fail.

      • 0 avatar
        John Horner

        “As has been said before, the bigger the government, the smaller the citizen.”

        I don’t think the US citizen was “small” in 1945, and yet the US government controlled everything then. Your equation sounds true, but isn’t.

      • 0 avatar
        jkross22

        The more power the government assumes, the less power individual citizens have. This isn’t debatable. You can say it’s being done for benevolent reasons, but it doesn’t change the calculus of who is taking power from whom.

      • 0 avatar
        MikeAR

        John Horner, just remember 1945 was wartime. Sure the government had a lot of power then and it seems llike heaven to you but had you spoken out against the government and the war, you would have been in prison, no questions asked.

        Also, does your nostalgia for a totalitarian government prevent you from remembering one of your hero Roosevelt’s shining moments, the interning of Japanese-Americans and the theft of their properties with no due process and no trials? You either are naive and don’t know what a strong, interventionist government is capable of doing or you want totalitarianism.

    • 0 avatar
      Hildy Johnson

      One cannot neglect the circumstances that triggered first the bankruptcies and then the bailout. This was different from the failure of one isolated company in otherwise good times.

      When the bottom had dropped out of the market in Germany, the government arranged for a sort of blanket bailout. They encouraged employers to put workers on short hours instead of letting them go, and in return the government helped with paying the wages.

      Pure capitalist doctrine? No. Sustainable? Certainly not. However, it kept a lot of valuable companies intact, and it helped greatly in Germany’s speedy recovery.

      This kind of thinking is called pragmatism – just like the GM and Chrysler bailout was a pragmatic solution. It’s not a new observation that you won’t find a lot of pragmatism among the wing nuts on the left or the right.

      • 0 avatar
        shaker

        “This kind of thinking is called pragmatism – just like the GM and Chrysler bailout was a pragmatic solution. It’s not a new observation that you won’t find a lot of pragmatism among the wing nuts on the left or the right.”

        Couldn’t have said it better myself.

    • 0 avatar
      John Horner

      I’m no fan of wars, nor of wartime, and not particularly of Roosevelt (though I dare say he did a better job than Hoover). My point is that government ipso facto isn’t good or evil and neither are private companies. I’m a die hard pragmatist, which drives ideologues crazy sometimes.

      My point is that there are many people who talk about WWII as a shining moment for the US, and then those same people often whine about Big Gubmint. Said people are also often big fans of the US military while also declaring that everything the government touches turns to trash. My point is to point out the discord in those viewpoints, and not to declare FDR a saint.

  • avatar
    PenguinBoy

    “From an ideological standpoint there will always be those opposed”

    Ideology makes bad policy. In an ideal world, there would be no government assistance, and each car would have a perpetual motion machine under the hood.

    Compared to the way things could have turned out, this is a good outcome. It will be cheaper for the taxpayers in the long run, and as pointed out, the automotive landscape is more interesting with Mopar than without.

    All automakers have their hands in the taxpayers pockets – how much government assistance do the transplants get in the form of tax breaks, cheap land, etc?

    • 0 avatar
      jkross22

      You’re equating tax breaks companies get to relocate to a particular state with a companies that couldn’t manage their balance sheets and had no idea how much they made or lost.

      You do realize this, right?

  • avatar
    dadude53

    One inferior and one at the best mediocre company combined will not result in a good one.

  • avatar
    d996

    Now that Marchionne got the keys I’ll bet he’s
    gonna drive this like a back in the day rental.

  • avatar
    doctor olds

    Anyone questioning Chrysler’s contribution to America should visit their HQ and Technical Center in Auburn Hills, MI. It is an immense, impressive facility that provides thousands of “gold collar” jobs right here. In fact, they have had to acquire additional facilities to house the engineers they are now hiring. Letting the company die would have eliminated this facility and all of the high level jobs.

    Administration and Engineering are huge components of any car business, but seem ignored by most in their assessments of contributions to America. Chrysler will likely maintain a huge “gold collar” presence in America. The simple truth is, buying Chrysler, Ford or GM provides far more support for our own economy than any foreign brand, where most or all “gold collar” jobs are in their home countries.


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