I think it’s important to realize that the Detroit bailout is no longer an ideological battle. At the beginning of this $40 b-b-b-billion boondoggle (and counting), Motown-fed politicians defended the bailout by screaming “jobs! jobs! jobs!” even though the automakers themselves were screaming no such thing (aware as they no doubt were that those jobs! jobs! jobs! were doomed! doomed! doomed!). Now, you hear very little regarding “saving the middle class.” In fact, the rhetoric claiming we need to shell out for the domestics because “we must protect America’s industrial base” has also gone away. Now, Detroit’s new New Deal rests on a green platform (i.e., EVs), and depends entirely on “viability.” In other words, getting our freaking money back. Only not.
Ladies and gentlemen, the auto bailout bullet train has left the station. Suppliers get $5B. ChryCo and GM get umpteen more billions. To not provide the money would be to turn our back on our “investment.” So now the bailout is about what it was always really about: the transfer of power. The Presidential Task Force on Autos (PTFOA) is like the TVA; the feds have wrested the reins of power over a huge chunk of the US auto industry from their mismanagers, and they ain’t letting go until someone somewhere forces them to.
So the news that ChryCo’s CEO claimed that Fiat had agreed to assume 35 percent of Chrysler’s debt— countered by Fiat’s no NSFW way— means nothing. It simply shows that either A) Bob Nardelli misspoke (Fiat gets 35 percent of Chrysler’s shares) or B) the CEO will do anything to keep sucking on the federal teat.
Silly man. Someone should tell Mr. Nardelli that the Detroit bailout is no longer about him or Chrysler per se. He’s nothing more than a political pawn. OK, a federal employee. So chillax, Bob. Chyrsler’s future is in someone else’s hands.
“So now the bailout is about what it was always really about: the transfer of power.”
This assistance was inaugurated under Bush and Paulson. Do you really think that nationalization was on their minds?
I see it as just another grasp at anything that may slow down the rapid deterioration of the economy, and find it hard to believe that the U.S. government really wants to run auto companies.
So FIAT wants 35% of Chrysler for free, without the liabilities?
If this arrangement is truly just about platform sharing, why go through the equity transfer at all?
Oh that’s right, it is not about platform sharing, but rather giving FIAT first place in line at the Ch 7 liquidation sale.
Yes, that miserable, awful failure that is the TVA.
Bad comparison. If you’re trying to say that this won’t work, it’s not a good idea to compare it to a successful and popular government program.
Proof positive in the revelation there that Chrysler will drop all retention bonuses. Out. Of. His. Hands. Thanks a lot, AIG.
If Nardelli’s Cerebus capital isn’t going to put any more money into chrysler, why would Fiat? Investing in chrysler is not a risk or a gamble it is a certainty of loss of principle. Do you know how lucky Daimler was to get Cerebus to take chrysler literally for nothing? Lightning will not strike twice, no one who can’t print their own money is going into that dark hole, ever. You watch who pays to set up the fiat models in the chrysler plants, it won’t be Cerebus, or fiat or citibank or the Russian republic, no it will be us the taxpayers. Fiat will get to prove that their little cars are better than chrysler’s since chrysler doesn’t have any little cars. What Fiat can’t do in Europe is prove that their little cars are better then the Japanese or German models. The same World cars mostly from the orient are now the owners of small car sales in America. They will give this market up over someones dead body. Remember it was cute little cars that brought Japan and Korea to the States at about the time Fiat was leaving as unable to compete. Another round in this war will not prove any different for Fiat. There would only be one thing worse than badging the little suckers fiats and that would be calling them chryslers.
As the saying goes, the worst lies are built on the truth. Yes, FIAT is years ahead of Chrysler in the building of small cars. Yes, FIAT makes attractive products that have been successful in countries like Brazil, Argentina, Spain, France, Greece, and Italy.
But what does Chrysler have that FIAT could possibly want? The UAW? Minivans? A terrible reputation?
If FIAT has extra money they need to launder, why pick Chrysler?
Sounds plausible to me. FIAT will most assuredly assume 35% of Chryslers debt, in the form of a cash payment from US taxpayers to be paid back, eventually.