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.
More by Robert Farago
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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 FIATs...you 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.
"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.