Chrysler bankrupt

[neurosport]

the billions WE gave them....

disturbing

we didn't give nobody shit.

they took it.

so when somebody gives someone something, and they take it, nobody gave anything....

no. giving is voluntary ...

if i rip the wallet out of your hands and tell the cop it was a gift i would be lying ...

 

[hipeter924]

I saw this coming. Obama was naive about the reality of the market. The company was a wreck...what does Obama do? Shoves billions of dollars into a dead cow...leaves the idiots that stuffed the company in the first place in charge...and now those same directors after fleecing the company for their own personal gain...call bankruptcy. Hate to say it...but I saw this coming.

 

[editec]

Those billions bought Chryler time to negotiate with their unions and Fiat, I think.

It may actually save the American taxpyers money in the long run.

Why?

Becuase I think the American taxpayer was on the hook for the pension funds.

Had the UAW workers there not agreed to give up most of their pensions and take back Chryler stock, then the Pension Benefit Guaranty Corporation would have paid out even more billions to save that pension.

Don't have the numbers but SUSPECT that might be the case.

 

[hipeter924]

Those billions bought Chryler time to negotiate with their unions and Fiat, I think.

It may actually save the American taxpyers money in the long run.

Why?

Becuase I think the American taxpayer was on the hook for the pension funds.

Had the UAW workers there not agreed to give up most of their pensions and take back Chryler stock, then the Pension Benefit Guaranty Corporation would have paid out even more billions to save that pension.

Don't have the numbers but SUSPECT that might be the case.

Yep. But that is beside the point. The fact is that Obama just shoved billions in without thinking...and expected the problems to magically go away if he put enough money in again and again...fleecing the taxpayer even further.

Its the company's board of directors and management that were the problem...you don't pay someone who turns the company into a dead cow to continue running it...its just plain stupid. Yet that's what Obama did.

The US govt can't bank roll failed companies forever...even if they have pensions in there...already Obama has given the US such a debt it will take decades if not 50 years to pay back...and that is before you add up the interest payments.

 

[Iriemon]

Those billions bought Chryler time to negotiate with their unions and Fiat, I think.

It may actually save the American taxpyers money in the long run.

Why?

Becuase I think the American taxpayer was on the hook for the pension funds.

Had the UAW workers there not agreed to give up most of their pensions and take back Chryler stock, then the Pension Benefit Guaranty Corporation would have paid out even more billions to save that pension.

Don't have the numbers but SUSPECT that might be the case.

Yep. But that is beside the point. The fact is that Obama just shoved billions in without thinking...and expected the problems to magically go away if he put enough money in again and again...fleecing the taxpayer even further.

Its the company's board of directors and management that were the problem...you don't pay someone who turns the company into a dead cow to continue running it...its just plain stupid. Yet that's what Obama did.

The US govt can't bank roll failed companies forever...even if they have pensions in there...already Obama has given the US such a debt it will take decades if not 50 years to pay back...and that is before you add up the interest payments.

The debt was $10.6 trillion when Obama took office, it's about $11.2 trillion now.

If we take the best surplus under Clinton -- the year 2000 when the debt decreased by $114 billion, it would take over 100 years to pay off the debt.

 

[editec]

Those billions bought Chryler time to negotiate with their unions and Fiat, I think.

It may actually save the American taxpyers money in the long run.

Why?

Becuase I think the American taxpayer was on the hook for the pension funds.

Had the UAW workers there not agreed to give up most of their pensions and take back Chryler stock, then the Pension Benefit Guaranty Corporation would have paid out even more billions to save that pension.

Don't have the numbers but SUSPECT that might be the case.

Yep. But that is beside the point.

No, it's not beside the point. That point is How to deal with the situation in a way that has the best possible outcome for the nation?

If my point about the pension guarantees is correct, then giving Chryler time to negotiate saved the American taxpayer billions more than it cost to keep it going.

The fact is that Obama just shoved billions in without thinking...

"Without thinking"? Now how the hell would you know that? That's obvious preposterous... there are teams of economists THINKING about what should be done.

They may be wrong, but please don't insult out intelligence by making silly claims about how you know what the president's state of mind is, okay?

and expected the problems to magically go away if he put enough money in again and again...fleecing the taxpayer even further.

On this point you MAY be right.

Its the company's board of directors and management that were the problem...you don't pay someone who turns the company into a dead cow to continue running it...its just plain stupid. Yet that's what Obama did.

A complaint I have been making about the banks that Bush II and Obama have bailed out often on this board. Chrysler's bailout cost was PEANUTS compared to those, you know?

The US govt can't bank roll failed companies forever...even if they have pensions in there...already Obama has given the US such a debt it will take decades if not 50 years to pay back...and that is before you add up the interest payments.

You complaints are not without merit, in that respect.

It all comes down to whether we believe that the entire economy would have crapped out in 2008, had Bush II and then Obama not set us on this course.

I personally don't know. I can see how it might have if we've been given real facts about what was going on.

But what I do know is that I think the solutions the MASTERs are imposing are not the ones I think we should have imposed.

So you and I are in partial agreement, at least.

 

[Ame®icano]

Question: If US Government become owner of Chrysler, do Chrysler employees become government employees?

BTW, news from this morning: Chrysler’s Dissenting Lenders Abandon Fight Over Fiat Sale

 

[editec]

Question: If US Government become owner of Chrysler, do Chrysler employees become government employees?

BTW, news from this morning: Chrysler’s Dissenting Lenders Abandon Fight Over Fiat Sale

No they don't.

Why not?

Because the government owns STOCK in a private company.

The government hasn't nationalized the company, (which is what socialism does) they BOUGHT STOCK in that comnpany.

Big difference.

 

[midcan5]

yay....all those billions for what, something they should have done BEFORE those billions....

Cheering (gloating over) the failure of an American company and an American institution is un-America to me. Hopefully you support your nation and its people by buying American, surely!


Made In Usa Bumper Stickers - CafePress

MADEINUSA.COM - understand the power of patriotic spending
American Made Products Directory - Made in USA, United States Manufacturers
Made in USA, Made in America, US, American-Made

 

[Ame®icano]

Question: If US Government become owner of Chrysler, do Chrysler employees become government employees?

BTW, news from this morning: Chrysler’s Dissenting Lenders Abandon Fight Over Fiat Sale

No they don't.

Why not?

Because the government owns STOCK in a private company.

The government hasn't nationalized the company, (which is what socialism does) they BOUGHT STOCK in that comnpany.

Big difference.

The fact that they bought stock in private company makes them (partial) owners of that company, and since government used money provided by taxpayers (nation), they did nationalize the company. It's the same with the banks and TARP money, where government now control banks. If not true, why would banks agree on 29 cents on the dollar?

 

[DiveCon]

Question: If US Government become owner of Chrysler, do Chrysler employees become government employees?

BTW, news from this morning: Chrysler’s Dissenting Lenders Abandon Fight Over Fiat Sale

No they don't.

Why not?

Because the government owns STOCK in a private company.

The government hasn't nationalized the company, (which is what socialism does) they BOUGHT STOCK in that comnpany.

Big difference.

The fact that they bought stock in private company makes them (partial) owners of that company, and since government used money provided by taxpayers (nation), they did nationalize the company. It's the same with the banks and TARP money, where government now control banks. If not true, why would banks agree on 29 cents on the dollar?

actually, they used money they dont even have yet, and likely wont have for generations

 

[hipeter924]

Those billions bought Chryler time to negotiate with their unions and Fiat, I think.

It may actually save the American taxpyers money in the long run.

Why?

Becuase I think the American taxpayer was on the hook for the pension funds.

Had the UAW workers there not agreed to give up most of their pensions and take back Chryler stock, then the Pension Benefit Guaranty Corporation would have paid out even more billions to save that pension.

Don't have the numbers but SUSPECT that might be the case.

No, it's not beside the point. That point is How to deal with the situation in a way that has the best possible outcome for the nation?

If my point about the pension guarantees is correct, then giving Chryler time to negotiate saved the American taxpayer billions more than it cost to keep it going.




"Without thinking"? Now how the hell would you know that? That's obvious preposterous... there are teams of economists THINKING about what should be done.

They may be wrong, but please don't insult out intelligence by making silly claims about how you know what the president's state of mind is, okay?




On this point you MAY be right.



A complaint I have been making about the banks that Bush II and Obama have bailed out often on this board. Chrysler's bailout cost was PEANUTS compared to those, you know?

The US govt can't bank roll failed companies forever...even if they have pensions in there...already Obama has given the US such a debt it will take decades if not 50 years to pay back...and that is before you add up the interest payments.

You complaints are not without merit, in that respect.

It all comes down to whether we believe that the entire economy would have crapped out in 2008, had Bush II and then Obama not set us on this course.

I personally don't know. I can see how it might have if we've been given real facts about what was going on.

But what I do know is that I think the solutions the MASTERs are imposing are not the ones I think we should have imposed.

So you and I are in partial agreement, at least.

1. It won't. Its failed company...you lose money when a company collapses and dies...simply claiming 'oh we will save the employees social security' is rubbish because in reality...the people are going to have no work anyway. So now...you have unemployed workers with no jobs + workers get their social security secured for a few months and then die.

2. Obama does have no idea. In fact Obama's policy people just wanted a big number.

3. I know I am right about the bail outs no May about it. I would seriously ask you to reconsider if you think that bailing out failed companies, with a failed board that is being propped up by Obama helps the economy or the deficit. Bush I agree may have done this too a few times. But who says I agreed with either. The fact is that bailouts never solve the problem when the problem is to do with consumer demand, incompetent management of the companies finances by the companies board, and finally lack of vision. That cannot be compensated for. Why bail out what has failed...and can never be rebuilt? Its stupid...no not stupid...disgusting.

 

[Ame®icano]

Can someone explain how can Fiat buy Crhysler and GM's Opel if they got no money? Fiat debt is around $6.6 billion.

 

[Ame®icano]

It started:

Michigan mayor's auto aid plan: Buy Michigan-made or you're fired.

Today Warren, and tomorrow...?

 

[editec]

Question: If US Government become owner of Chrysler, do Chrysler employees become government employees?

BTW, news from this morning: Chrysler’s Dissenting Lenders Abandon Fight Over Fiat Sale

No they don't.

Why not?

Because the government owns STOCK in a private company.

The government hasn't nationalized the company, (which is what socialism does) they BOUGHT STOCK in that comnpany.

Big difference.

The fact that they bought stock in private company makes them (partial) owners of that company, and since government used money provided by taxpayers (nation), they did nationalize the company. It's the same with the banks and TARP money, where government now control banks. If not true, why would banks agree on 29 cents on the dollar?

If they're nationized the company, the employees of Chrysler would be GOVERNMENT EMPLOYEES.

My major complaint about the bailout is that we didn't get 100% ownership of the company.

After all it WAS insolvent when we bailed it out.

Its books value was essantially less than ZERO.

 

[editec]

Can someone explain how can Fiat buy Crhysler and GM's Opel if they got no money? Fiat debt is around $6.6 billion.

They used fiat EUROs, same as the US government used FIAT dollars?

Just a guess, of course, I'm no economist.

 

[Zoomie1980]

yay....all those billions for what, something they should have done BEFORE those billions....

Cheering (gloating over) the failure of an American company and an American institution is un-America to me. Hopefully you support your nation and its people by buying American, surely!


Made In Usa Bumper Stickers - CafePress

MADEINUSA.COM - understand the power of patriotic spending
American Made Products Directory - Made in USA, United States Manufacturers
Made in USA, Made in America, US, American-Made

Yea, I buy non-union Toyota....made in Tennessee....

 

[Ame®icano]

yay....all those billions for what, something they should have done BEFORE those billions....

Cheering (gloating over) the failure of an American company and an American institution is un-America to me. Hopefully you support your nation and its people by buying American, surely!


Made In Usa Bumper Stickers - CafePress

MADEINUSA.COM - understand the power of patriotic spending
American Made Products Directory - Made in USA, United States Manufacturers
Made in USA, Made in America, US, American-Made

Yea, I buy non-union Toyota....made in Tennessee....

Hypothetically, if GM & Chrysler get rid of Union and drive price of their products down, would you buy their products?

 

[Zoomie1980]

Cheering (gloating over) the failure of an American company and an American institution is un-America to me. Hopefully you support your nation and its people by buying American, surely!


Made In Usa Bumper Stickers - CafePress

MADEINUSA.COM - understand the power of patriotic spending
American Made Products Directory - Made in USA, United States Manufacturers
Made in USA, Made in America, US, American-Made

Yea, I buy non-union Toyota....made in Tennessee....

Hypothetically, if GM & Chrysler get rid of Union and drive price of their products down, would you buy their products?

First Automaker that makes an all-electric SUV plugin that goes 200miles or more per charge for under $40,000, I'll buy it. Phoenix Motors is close......

 

[Annie]

What's being done with Chrysler is going to cause so many problems down the line, but I do think that is the administration's plan:

Chrysler and the Rule of Law - WSJ.com

Chrysler and the Rule of Law
The Founders put the contracts clause in the Constitution for a reason.
By TODD J. ZYWICKI

The rule of law, not of men -- an ideal tracing back to the ancient Greeks and well-known to our Founding Fathers -- is the animating principle of the American experiment. While the rest of the world in 1787 was governed by the whims of kings and dukes, the U.S. Constitution was established to circumscribe arbitrary government power. It would do so by establishing clear rules, equally applied to the powerful and the weak.

Fleecing lenders to pay off politically powerful interests, or governmental threats to reputation and business from a failure to toe a political line? We might expect this behavior from a Hugo Chávez. But it would never happen here, right?

Until Chrysler.

The close relationship between the rule of law and the enforceability of contracts, especially credit contracts, was well understood by the Framers of the U.S. Constitution. A primary reason they wanted it was the desire to escape the economic chaos spawned by debtor-friendly state laws during the period of the Articles of Confederation. Hence the Contracts Clause of Article V of the Constitution, which prohibited states from interfering with the obligation to pay debts. Hence also the Bankruptcy Clause of Article I, Section 8, which delegated to the federal government the sole authority to enact "uniform laws on the subject of bankruptcies."

The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar.

...

Violating absolute priority undermines this commitment by introducing questions of redistribution into the process. It enables the rights of senior creditors to be plundered in order to benefit the rights of junior creditors.

The U.S. government also wants to rush through what amounts to a sham sale of all of Chrysler's assets to Fiat. While speedy bankruptcy sales are not unheard of, they are usually reserved for situations involving a wasting or perishable asset (think of a truck of oranges) where delay might be fatal to the asset's, or in this case the company's, value. That's hardly the case with Chrysler. But in a Chapter 11 reorganization, creditors have the right to vote to approve or reject the plan. The Obama administration's asset-sale plan implements a de facto reorganization but denies to creditors the opportunity to vote on it.

By stepping over the bright line between the rule of law and the arbitrary behavior of men, President Obama may have created a thousand new failing businesses. That is, businesses that might have received financing before but that now will not, since lenders face the potential of future government confiscation. In other words, Mr. Obama may have helped save the jobs of thousands of union workers whose dues, in part, engineered his election. But what about the untold number of job losses in the future caused by trampling the sanctity of contracts today?

The value of the rule of law is not merely a matter of economic efficiency. It also provides a bulwark against arbitrary governmental action taken at the behest of politically influential interests at the expense of the politically unpopular. The government's threats and bare-knuckle tactics set an ominous precedent for the treatment of those considered insufficiently responsive to its desires. Certainly, holdout Chrysler creditors report that they felt little confidence that the White House would stop at informal strong-arming.

Chrysler -- or more accurately, its unionized workers -- may be helped in the short run. But we need to ask how eager lenders will be to offer new credit to General Motors knowing that the value of their investment could be diminished or destroyed by government to enrich a politically favored union. We also need to ask how eager hedge funds will be to participate in the government's Public-Private Investment Program to purchase banks' troubled assets.

And what if the next time it is a politically unpopular business -- such as a pharmaceutical company -- that's on the brink? Might the government force it to surrender a patent to get the White House's agreement to get financing for the bankruptcy plan?

Mr. Zywicki is a professor of law at George Mason University and the author of a book on consumer bankruptcy and consumer lending, forthcoming from Yale University Press.