I wish they would have filed for bankruptcy in the first place and saved us 4 billion dollars in bailout money. No more bailouts.
They filed??? Wow, I didn't see this coming!
Fiat and UAW (and you and me) are to be the new owners.
Can't wait to see what product that vomits out.
(http://img294.imageshack.us/img294/1251/buddy417xec9.jpg)
(http://www.scenicanemia.com/wp-content/uploads/2008/09/ugly_car.jpg)
Bring back the K Car, that saved X-ler once.
(http://cache.jalopnik.com/assets/resources/2008/06/conti-k-car.jpg)
(https://www.autoloandaily.com/images/stories/leeiacoccatimecover.jpg)
I'd vote Iacocca as being one of THE stories of the 1980's.
I am not sure if this has been discussed yet but there has been an allegation by an attorney representing the f'd over bond holders that the white house has threatened to sic the press corps on those folks that dare criticize the bankruptcy plan. Here's an article that aptly sums up my feelings on this issue and the reamed out bond holders:
http://www.washingtonexaminer.com/politics/White-House-puts-UAW-ahead-of-property-rights-44415057.html
Oh, I've moved right past that and directly into the deal where they don't have to repay the $7,200,000,000.00 they owe to taxpayers:
QuoteThis revelation was buried within Chrysler's bankruptcy filings last week and confirmed by the Obama administration Tuesday. The filings included a list of business assumptions from one of the company's key financial advisors in the bankruptcy case.
Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler's operations during bankruptcy.
An Obama administration official confirmed Tuesday that Chrysler won't be repaying the loans . . .
http://money.cnn.com/2009/05/05/news/companies/chrysler_loans/index.htm
Won't be repaying the loans? Then THEY WEREN'T REALLY LOAN, WERE THEY?
What do "We The People" get in return? An 8% equity stake in the company.
2 years ago Cerberus Capital Management bought an 80% stake in the company for $7.4 Billion (http://money.cnn.com/2007/05/14/news/companies/chrysler_sale/index.htm), valuing the company at $9,250,000,000.00. From that point forward it has lost more money and had more problems as well as allegedly being stripped of assets by the equity firm (including portions of the profitable financing wing). Thus, it is certainly worth less than the $9.25 Billion it was valued at 2 years ago.
But operating with the assumption that the value remains unchanged, an 8% stake on the private market would be worth $740,000,000. So we are overpaying by a factor of TEN FOLD for our 8% share in the money losing company. And 6 months ago we didn't see this coming? REALLY?
Want more fun? The Bankruptcy filing stipulates that for the restructuring to be successful they will need billions more from the government.
And the Union? They get large stake in this deal too. In fact they get a 55% ownership in Chrysler. Surely they will want to control the company with their expert labor to return it to profitability and increase long term prospects for more lasting UAW jobs, right?
Hell no. The UAW is selling off their interest in Chrysler as soon as they can. (http://www.google.com/hostednews/ap/article/ALeqM5jf7ciSeWxxGbJJmDV5aX9luULrHgD97VOT5G0) They get 55% and a note to cover retiree health costs. If they unload the stock they are mere victims when the note becomes worthless and the Fed will surely pick up the tab. So there's another $4.5 Billion I foresee going to Chrysler.
The company is dead. Make plans to bury this thing. If this is a management deal in bankruptcy to bury it with a long and orderly funeral procession, so be it. But certainly this isn't a viable survival plan for a company.
love 'em in the neck. Let Shysler die.
Put them in a bag and drop them in the river. We probably need one care company to drop off anyway.
Quote from: Trogdor on May 06, 2009, 04:15:04 PM
Put them in a bag and drop them in the river. We probably need one care company to drop off anyway.
The spell check police are out in full force today. Watch out.
CF, I cannot fathom how any of this is legal. How can the government essentially rewrite the bankruptcy code for this one company and dissolve the secured creditor status of bond holders in favor of the unsecured UAW folks? How can this government taking be consistent with the 5th Amendment? Oh I know, it's because times are tough.
I am so pissed at Bush for starting this and Obama for deciding that WE the taxpayer do not get OUR money back. Seriously, that bailout money wasn't his, it's ours. EIGHT FREAKIN BILLION dollars done the sh*thole for nothing.
For now, don't buy another Chrysler or GM car again CF. As for me, I am seriously thinking of calling it a career and using the courts to stop some of this mindlessness. After all, we live in one of the more conservative federal court districts in the country. Interested?
GM's CEO says GM's bankruptcy is a possibility. We can only hope.
http://www.cnbc.com/id/30682967
"Buy Boycott American"
They should have done this two years ago. Now they've foobared over not only the share-holders but the taxpayer as well.
Where the proverbial rubber meets the road: (http://www.ft.com/cms/s/0/1e2bf9ea-3e54-11de-9a6c-00144feabdc0.html)
QuoteCredit insurance hampers GM restructuring
Hedge funds and other investors stand to make billions of dollars on credit insurance contracts if GM declares bankruptcy, a prospect that is complicating efforts to persuade creditors to agree to a restructuring plan for the automaker, analysts say.
Holders of $27bn in GM bonds have until June 1 to decide whether to swap their debt for a 10 per cent equity stake in the company as part of an offer that would give the US government 50 per cent of the shares, a United Auto Workers union healthcare fund 39 per cent and existing shareholders 1 per cent.
However, analysts say the chances the proposal will be accepted have been diminished by the large number of credit default swap (CDS) contracts written on GM's debt.
Holders of such swaps would be paid in the event of a default – but would lose money if they agreed to restructure GM's debt. For investors who own bonds and CDS, this could create an incentive to favour a bankruptcy filing.
I've been wondering how CDSs work in the real world, and lo and behold here they are operating behind the scenes of the highest profile corporate restructuring battle since Bell telephone split up. I know that there're some pretty strong advocates here for blowing the company up or something similarly apocalyptic, but this article goes to prove that there are interested parties far outside the traditional triad of the owners, workers, and car-buyers. It's also a glimpse into how those interested parties could use their leverage to alter the course of the company independent of the those traditional three stakeholders.