I love the whinning about Obama giving stake in Chrysler to the UAW, I mean the current owners were doing a swell job. The Union is a creditor, now they take stock, just like any other creditor would who has a stake in a bankrupt company. you guys want the the union to give up everything they've gained over the years, they would be idiots to do so, just like the hedge funds who have a stake didn't want to take pennies on their dollars. This is a concession for the Union, they get a bankrupt dinasour automaker, whoopteefreakindoo
chrysler's cars are crap. i remember a friend who had a dodge neon, and when it got stolen, my friend was the happiest person on earth. took the insurance money and put it down on an accord.
If only... LOL. OMG, Obama should just screw the UAW folks. They aren't really important. They are less important than other citizens. That's fo sho...
i do, that's my point- the UAW has been placed in line ahead of chrysler's creditors, which flies in the face of centuries of bankruptcy law and precedent.
what's the planned payout for the other creditors versus UAW? and can't different unsecured creditors get different payouts? fair and equitable treatment doesn't mean exact same treatment. UAW's interests are more aligned with keeping chrysler a healthy viable company than a typical unsecured creditor, no? does that not allow a bankruptcy court to give them different payouts?
The UAW is a creditor. What do you think they have given up in exchange for ownership? edit: look up general motors balance sheet since its public. see how much money they owe in post retirement benefits.
The problem is that the Union was given far more favorable terms than the bondholders for political reasons. And the unions were a big reason the company went down.
Maybe I'm not understanding, but why did Chrysler or the Bondholders have to accept that if they felt it unfair? If they were going to avoid bankruptcy as a result, I'd understand. But if they were going to bankrupt either way, why do it? I really don't know the details, but is it possible the UAW got a stake in exchange for other concessions on wages and other things that they didn't have to give up?
I don't know how much they gave up but there are reports that UAW is selling some of its stock in the company to cover retiree obligations
You are right, I am actually thinking of GM here, where the bondholders have not agreed. However, there are a small group of Chrysler bondholders who have not agreed to the terms, but most have. Yes, as I understand it, the UAW got a stake in exchange for concessions.
I can't say I expected to get that money back, but Bush's and Obama's guys were saying we'd get this money back, we'd be first in line, etc. etc., when they were pitching this loan. I don't think you should call it a loan when you have no expectation of being repaid.
Best option would have just been to let them fail, IMO, and use the billions to help laid off employees. Instead, Chrysler will live on to suck down capital into a black hole. If Fiat can actually make it profitable, I would be surprised.
I'm a bit surprised that Fiat is considering taking on an albatross company. It can't be that the US govt is leaning on them to do it. Aren't there better investments out there for Fiat to make?
It's an albatross of a company because of its debt and labor situation and the quality of its cars. But brandwise, it's actually pretty strong - the #4 highest-selling brand in the US, I believe. It's a great way for Fiat to break into the US market. The debt situation is resolved. Assuming the bankruptcy (and partial UAW ownership) helps create a better labor situation, Fiat can deal with the quality issue themselves (assuming they know how to produce quality cars than Chrysler did). And they are instantly in the US market with pre-built manufacturing facilities and dealerships. Sort of the same thing as the Chinese car companies looking at Saturn as a way to break into the US market.
