Chrysler To Declare Bankruptcy Next Week?
Unnamed sources tell the New York Times that the Treasury has agreed “in principle” to protect UAW pensions and retiree health care when Chrysler files for C11 “as soon as next week.” Protect with what? Fifty percent new Chrysler stock and 50 percent new Chrysler profits. Or, uh, more Treasury money. Fiat, say the sources, will “complete its alliance” with (i.e., pick the carcass of) Chrysler during bankruptcy. The only loose thread for the sources who “were not authorized to discuss the case,” is the bondholder brigade which recently turned down the Treasury’s haircut offer. Which leads one to believe that this revelation comes from someone negotiating opposite Chrysler’s bondholders (the Treasury) as a none-to-subtle bargaining gambit. Jump, or we file.
But if these bondholders have gutted out their hand this far, are they really going to settle for 22 cents on the dollar at the mere threat of a bankruptcy filing? Let alone a filing in which the government has pledged to absorb a major impact of (UAW legacy costs)? I imagine that Chrysler bondholders (never met one) might be the kind kinds of hardy souls that actually look forward to fighting the government over the company’s scraps. On the other hand . . . If “once Chrysler emerges from bankruptcy protection, it would largely be owned by Fiat, the UAW, the Treasury and its lenders,” as the Times says, this high-stakes poker game doesn’t bode well for the post-Ch11 joint ownership.
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"would you want to go to war against the federal government?" Thanks for the reply I wasn't sure if I understood things correctly or not.
"Yayyy!! The overwhelming majority of Americans who receive no pension must be compelled against their will to support those with a sweetheart pension! Very sovietesque. Even though the pension was a private contract between employer and employee, and it would be a sad thing to see it go, somehow it is now all our responsibility. We who never got to benefit from the high wages, high benefits, job guarantees, and indeed from the union whose very existence ensured that fewer jobs would be available for all." Maybe more people should join unions and fight for wages, benefits and guarantees. Think about it, are the union wages too "high" or are yours too low. A simple example; Better to have 500 employees make $20 per hour than 1000 employees make $10 per hour. If the companies have to reduce production and eliminate 1/2 their workforce, so be it.