Obama to Announce Chrysler C11 at Noon, EST
Those damn hedge funds and their secured debt! Despite enormous pressure from the US Treasury, “holdout creditors” rejected the federal government’s offer to increase the cash part of a proposed debt-for-equity swap to $2.25 billion (up from $2 billion). A high noon Wednesday deadline came—and went. Hey! What happened to Chrysler’s “owners” Cerberus? Anyway, according to Automotive News [AN, sub], the feds—under Presidential Task Force on Automobiles leader Steve “Chooch” Rattner—are stepping-up their campaign to blame the recalcitrant bondholders for ruining their non-C11 plans to recreate the ailing American automaker as a Fed-Fiat-UAW partnership. “While the Administration was willing to give the holdouts a final opportunity to do the right thing, the agreement of all other key stakeholders ensured that no hedge fund could have a veto over Chrysler’s future success,” an “official” told AN. “Their failure to act in either their own economic interest or the national interest does not diminish the accomplishments made by Chrysler, Fiat and its stakeholders nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward.”
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And the blame starts... now. Can someone explain the "bankster" insult to me, btw? I don't get it.
While I've been guilty of blaming the government for this monumental mess, the blame rests solely with Chrysler leadership. Like any of the big auto mfgs, they've had ample time to create compelling, desirable cars and trucks. They failed. Their failure has little to do with Republicans or Democrats, and everything to do with what they lacked: leadership, corporate culture of success and commitment to quality at the manufacturing plants. Yes, Bush throwing a lot of money at them, and Obama throwing even more money at them was stupid, it's not their fault that Chrysler sucks.
The warm-up was pretty funny, actually. It was as if Chrysler, GM and Ford were the only companies that provided a middle-class dream to workers in the 20th Century. It was also funny when he talked about Chrysler's innovations and what not. Now, that's true that Chrysler was once an innovator, but they haven't shown much innovation since the Cupholder. Well, so the PTFOA approves of the business plan, and Fiat won't get anything until the U.S. taxpayer gets paid. Let's play along for a second and say, "Gosh, you guys are right.!" There's some numbers I'd like to see, but won't. 1. What's Chrysler's burn rate now? 2. How much will we have to keep pouring into Chrysler to keep it alive until it starts cranking out UAW-built Chrysler-Fiats that the PTFOA thinks Americans will buy? 3. What do the marketing studies show about American consumers' perceptions of Chrysler-built Fiats vs. American built Hondas, Toyotas, Subarus, Fords, etc. 4. How long will it take Chrysler to repay the billions it's going have to pay back the U.S. government? How will that number compare to the already profit killing legacy employee cost and health care costs? We've been hearing for years from Detroit that legacy costs are what drives up the price of US built cars. Well guess what, they just added to it. The upside of this? Well, at this point, nobody has been proven wrong. This is still a functionally dead company. Nothing has changed. We should place bets on how much longer Chrysler will last. My guess is that sometime shortly after the next mid-term election, Chrysler's a goner.