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Another Economic Saab Story: Chrysler Files for Chapter 11 April 30, 2009

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Happy one hundred and one days in office President Obama.Can’t you just hear the footsteps of the revolution now?

Wall Street Journal
By JOSH MITCHELL and HENRY J. PULIZZI
April 30, 2009

Chrysler LLC filed for Chapter 11 bankruptcy protection in New York Thursday, kicking off what the Obama administration predicts will be a 30- to 60-day restructuring of the third-largest U.S. auto maker.

At the same time, Chrysler entered into a partnership with Italian auto maker Fiat SpA, Mr. Obama said in a noon address. Mr. Obama said the partnership would not only let Chrysler survive “but to thrive.”

The U.S. government will provide up to an additional $8 billion in aid, including up to $3.5 billion in so-called debtor-in-possession financing, to ensure Chrysler survives the historic reorganization process. The administration had hoped to keep the car maker out of court but decided it was the only option after a deal to cut the company’s debt was rejected late Wednesday by several of the company’s lenders, a senior administration official said.

So again President Government steps in and gives more money- $8 billion. That is $8 Billion of our tax payer dollars paid as a dowry to Fiat- an international company. Wouldn’t this lead to increased competition for the US auto industry? Was I just hearing things last night or didn’t Obama say during his historic 100 day anniversary press conference that he did not enjoy interfering in affairs outside of Washington? He doesn’t want to be running American businesses. I heard it. Did anyone else?

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Obama said he wanted “to disabuse people of this notion that somehow we enjoy, you know, meddling in the private sector.”

“If you could tell me right now that when I walked into this office that the banks were humming, that autos were selling, and that all you had to worry about was Iraq, Afghanistan, North Korea, getting health care passed, figuring out how to deal with energy independence, deal with Iran, and a pandemic flu, I would take that deal,” Obama said.

Now compare Obama’s quote from Wednesday with the WSJ story:

In exchange for the aid, the U.S. government will take a “small equity” stake in the new company, which will be partly owned by Fiat. According to a White House fact sheet, the U.S. Treasury will hold 8% of the reorganized company, while Fiat would hold 20% and the governments of Canada and Ontario would receive 2%. The U.S. government would have the power to appoint board members at the new company but would not get involved in day-to-day operations, the administration official said.

Nah, that doesn’t sound like an administration that wants to meddle in the private sector. I suppose President Obama also taught courses in bankruptcy law along with his con law courses. Watch out America next Obama will force us to purchase their cars. Every model comes with a cup holder for your Kool Aid.

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In my opinion, Chrysler and the other auto giants should have been untouched by the federal government and allowed to fail. Yes that is very cruel and conservative minded of me. That is what capitalism is. Businesses start, they fail, shit happens.  Chrysler should have filed for bankruptcy months ago. Because of government intervention or for lack of a better term “meddling”. We have wasted billions, perhaps trillions of taxpayer TARP money on auto companies that are still unsuccessful despite the bailouts. Great, just great.

Autographed Letter Signed,

AFROCITY

 

 
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