The Hoosier State is trying to throw a monkey wrench into Chrysler/Fiat/Uncle Sam’s plan to create a born again American (ish) automaker. Indiana’s State Treasurer, Richard Mourdock, filed papers with judge Arthur Gonzalez, asking the federal bankruptcy court to appoint an examiner to, um, examine ChryCo’s books. Mourdock also wants Gonzalez to take ChryCo away from the Presidential Task Force on Autos (PTFOA) and hand it to an independent trustee. Mourdock claims to be protecting pension funds for his state’s retirees. Chrysler claims his actions would throw the company into liquidation, which would eliminate four thousand Indiana jobs and endanger the incomes of those self same nine thousand pensioners. So there, nuh. The chances of Indiana slowing down the PTFOA fast track strategy are roughly nil; Chrysler accounts for less than one percent of the state’s pensioner fund. So what gives? Make the jump for the real reason Indiana wants to make Chrysler’s life miserable . . .
The abandoned Getrag transmission factory, designed to bring the joys of DSG to Chrysler’s entire product line. The $530 million dollar plant was supposed to generate 1400 jobs. Tipton County poured money into the project: tax breaks, infrastructure improvements; hell, they bought the land. When the deal went seriously south, Chrysler stiffed the state for millions, souring voters to the pols who’d sold them a bill of goods. Payback, baby.
Lie down with dogs…
Step to the rear of the line, Indiana.
This is exactly why government has no business giving out goodies to private industry.
John
Indiana is doing the right thing for the wrong reason. At least someone is trying to stop this ChryCo fiatsco before its too late.
Mopar failed. Twice. Enough already, kill it, rip it, and disperse it.
Well –
A. The Indiana AG and trustee are correct, in every respect.
B. They really do need to sue, to protect themselves against accusations that they breached fiduciary duties.
C. Payback or no payback, nobody seriously disputes that the bondholders would be better off with a liquidation.
D. There is no chance that Fiat/Chrysler can ever make a profit.
If the bankruptcy judge signs off on fast-tracking the Chrysler bankruptcy, he isn’t doing his job and is going to go down in history as just another political hack unable to handle political pressure. Had it been written by the UAW – and who’s to say it wasn’t – the Chrysler deal couldn’t be a better deal for the UAW membership and a worse deal for everyone else, creditors and taxpayers alike.
Just think of buying a car produced by the proud tradition of excellence for which Fiat and Chrysler are so well known.
I recently ordered some shirts from BlueCotton.com (a site that lets you design your own shirts). I signed up to their twitter feed to perhaps snag a discount code, and they tweet pics of shirts coming off the press. This FIAT shirt made me laugh.
It’s bad enough that politicians, or those appointed by them, succumb to extortion in handing out money in these cases. But at least the could condition it on people being hired and paid instead of fronting it to these con artists. I’m shocked that Feinberg took somebody to the cleaners.
I read that the Ohio Workers’ Compensation fund was also concerned that “old” Chrysler, being a self funded entity in the state for WC would stiff the state for their WC liabilities, landing it back on the state fund that can ill afford any more issues. Haven’t seen anything on this in the last week or so.
I also heard that a lawyer was planning to sue to stop a teacher’s union pension fund from getting less than a full return on their secured loan to Chrysler. Now I can’t find the article though. It was linked on Drudge sometime last week. Now that rumors (?) are circulating that GM’s secured bondholders will get a full ROI I expect more of these complaints to surface.