CAW: PTFOA to Create "Good" and "Bad" Chrysler

Robert Farago
by Robert Farago
caw ptfoa to create good and bad chrysler

Buried in the Detroit Free Press story trumpeting the Canadian Auto Workers’ latest agreement with Chrysler: news that the Presidential Task Force on Automobiles (PTFOA) plans to split the zombie automaker into two.

“We’re living to fight another day,” [CAW Boss Ken] Lewenza said. “But the fear and uncertainty is not over. Not by a long shot.” Specifically, he said representatives of Chrysler and Fiat told him that if Chrysler files for Chapter 11 bankruptcy protection next week, the company will be split into “a good company and a bad company. And the bad company would be sold off.”

This is the first we’ve heard of ChryCo’s cleavage, although the PTFOA has been promoting it for GM for weeks. One supposes that “good” Chrysler would consist of Jeep, Dodge trucks and . . . that’s it. So could it fly?

First, the people in charge of this Chrysler clusterfuck—the Presidential Task Force on Automobiles—would have to “convince” ChryCo’s debt holders to get them to exchange secured debt for equity. Note the word “secured.” The debt holders have first right to the proceeds from the sale of the “good” bits the PTFOA would need to create “good” Chrysler.

Second, the PTFOA would have to convince all the stiffed stakeholders, from Chrysler’s unions to its squeezed-to-death suppliers, that a stake in “good” Chrysler is better than selling the whole schmeer, grabbing what money’s available and calling it a day. NB: the proceeds from the sale of “bad” Chrysler would be somewhere between fuck-all and nothing to write home about.

To get all that done, the PTFOA would have to parcel-out the new “good” Chrysler to seven—count ’em five—major groups: Chrysler debt holders, the US Treasury (that’s you and me), Daimler, the CAA, the UAW, Fiat and everyone else. Did the PTFOA forget the old adage “too many cooks build a Sebring?” Or just ignore it?

This plan sounds crazy, but you know what? It will never work. Too bad that won’t stop it from happening.

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2 of 18 comments
  • Stu Sidoti Stu Sidoti on Apr 26, 2009

    A Chrysler Engineering friend of mine and I were having a similar discussion...we thought that if you had: The Jeep line (minus Commander) The FS-truck line (plus perhaps a FS SUV variant that Daimler would not allow...if gas stays low) The NEXT 300-Charger The Challenger The Minivan line The Sprinter van line A 200-C-shaped smaller sedan with an interior competitive with Toyohonda Along with offering a Hybrid Variant for all vehicles listed above...Plus a few might just have the basis for a competitive, smaller automaker if you sweat the details and put forth the kind of spirit that Chrysler had in the 80's and 90's when they were being quite innovative. It might work. Maybe...Let me at it-I'll run it like Lido did in the late 80's and unshackle the creative folks at Chrysler from their Cerberus captors.

  • Guyincognito Guyincognito on Apr 26, 2009

    "the proceeds from the sale of “bad” Chrysler would be somewhere between fuck-all and nothing to write home about" Proceeds? Bad Chrysler? They will have to pay someone to take the bad Chrysler assets. Consider that Daimler paid Cerberus to take 80% of Chrysler off their hands when it was in far better shape a few years ago.

  • Zerofoo "Hyundais just got better and better during the 1990s, though, and memories of those shoddy Excels faded."Never. A friend had an early 90s Hyundai Excel as his college beater. One day he decided that the last tank of gas he bought was worth more than the car. He drove it to empty and then he and his fraternity brothers pushed it into the woods and left it there.
  • Kwik_Shift There are no new Renegades for sale within my geographic circle of up to 85 kms. Looks like the artificial shortage game. They bring one in, 10 buyers line up for it, $10,000 over MSRP. Yeah. Like with a lot of new cars.
  • Ribbedroof In Oklahoma, no less!
  • Ribbedroof Have one in the shop for minor front collision repairs right now,I've seen more of these in the comments than in the 30 years I've been in collision repair.
  • Tassos And all 3 were ordered by Fisker's mother. Seriously, given Fisker's terrible record of Failure in the past, only an utter loser, (for example, VGhost or Art Vandelay?), looking for a BEV terrible enough to be a proper replacement of his 11 mile range Fiat 500E, would order one of these. (apart from Fisker's mother)