Bailout Watch 464: Indiana to ChryCo: Settle Your Getrag Debt FIRST
From the moment Chrysler announced a deal with Getrag to build paddle shift transmissions in Indiana, TTAC flagged it as a disaster in the making. That was back in late ’07. By then, ChryCo sales were tanking. The idea that the ailing American automaker needed—or could afford—700K new transmissions per year was incredible. And so it didn’t come to pass, taking taxpayer credits and grants with it. And now IBJ.com (no really) reports that Indiana Rep. Dan Burton met with U.S. Treasury Secretary Tim Geithner and demanded that ChryCo refund Tipon County $10M before they get their next round of bailout bucks.
County officials told Chrysler they want the company to honor an agreement to cover all the county’s cost if the plant is not completed. In addition to the $5.5 million in bonds sold to Chrysler, Tipton County wants the company to provide $4.2 million for other bonds and $300,000 in county economic development funds used for infrastructure improvements.
Tipton County Commissioner Jane Harper said any federal loans to Chrysler should be tied to the money the county is owed.
“They are asking the American people to bail out Chrysler when they won’t honor a commitment to Tipton County,” she said. “This goes beyond a financial issue. It is a moral and ethical issue because they did not honor a commitment.”
ChyrCo says talk to Getrag. And I say using federal bailout bucks to pay off state and county debts doesn’t strike me as fair either. Of course, bankruptcy would sort this all out—and Chrysler’s $500M Canadian tax bill. Just sayin’.
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Jeff, yes you did. Even if it could be considered a WAR, I'm surprised RF didn't have an opinion. See: http://finance.yahoo.com/news/AP-Source-GM-CEO-Wagoner-to-apf-14776948.html
jolo, I was about to post that! The next week is going to be interesting, to say the least. I wonder what it was that caused Rick to snap...
In addition to the economic loss, this is a loss for introducing improved automobile technology from an American manufacturer that has a history of such innovations (dual clutch transmissions). It is a result of a "triple witching hour" of events - bad economy and bad management. Mostly a result of bad handling of Chrysler by Diamler. Just because you know how to make wonderful $60K cars (debatable) doesn't mean you know how to make $20K cars.
Part of the reason Mr. Farago didn't get right to the story immediately probably has to do with him injuring his knee. Best wishes for a full recovery Robert, but don't take too many pain killers, as they might dull your edge, and there's bound to be a lot of news to cover in the coming weeks.