Posted on 04/24/2009 12:06:46 PM PDT by Michael Eden
The government is preparing the way for a "Dr. Kevorkian"-style bankruptcy for Chrysler. A couple of paragraphs from the New York Times story should suffice:
U.S. Is Said to Push Chrysler to Prepare for Chapter 11You know, I'm old enough to remember a time way, way back when businesses were actually allowed to attend to their own financial affairs.DETROIT — The Treasury Department is directing Chrysler to prepare a Chapter 11 bankruptcy filing that could come as soon as next week, people with direct knowledge of the action said Thursday.
The Treasury has an agreement in principle with the United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing, said these people, who asked for anonymity because they were not authorized to discuss the case.
And they've got a guy who was either too dishonest or too stupid to pay his own tax bill organizing the thing: "Turbo Tax Tim" Geithner.
That's bad enough, but then the snowball starts rolling straight to hell.
The government isn't making its arrangements with Chrysler; it is rather making them with the United Auto Workers, and then imposing the conditions onto Chrysler.
This is tantamount to saying that Chrysler will never come out of bankruptcy, given the fact that the company needs to be able to escape its legacy costs if it is to ever have any chance of ever being viable.
Would Italian Fiat want this gold-plated turd? Not very likely. The Obama administration's kissy-kiss with the UAW on a bankruptcy deal (and who ever would have seen THAT coming) is frankly akin to a bridal consultant pushing a bride-to-be to gain 500 pounds and have her face chewed off by a deranged chimpanzee in order to prepare her for her nuptials. The bridal consultant, the chimp, and the bride; the Obama administration, the UAW, and the company: neither situation is going to end well.
Realize this: Obams imposing a suicide pack onto Chrysler. There is no way the company will be able to attract private investment as long as the unions get to dictate terms. And realize this: the green cars that the Obama administration wants to impose on the American auto industry aren't profitable. Which is why no American money wants anything to do with Barack Hussein's GM or Chrysler (and very soon Ford). That leaves us hoping that some foreign country's investors are more stupid than ours are.
This is nothing less than a suicide pact. There's a spaceship hidden behind big labor's version of the Hale-Bopp comet, and the Obama administration wants Chrysler and GM to prepare to board.
The NY Times article continues:
The only major question that remains unresolved is what happens to Chrysler’s lenders, who hold $6.9 billion in company debt. The government’s most recent offer, presented Wednesday, would give the company’s lenders about 22 cents on the dollar, or $1.5 billion, and a 5 percent equity stake in a reorganized Chrysler. Earlier this week, a steering committee of the lenders proposed that they receive 65 cents on the dollar, or $4.5 billion, and a 40 percent equity stake.Let me put the first sentence of the last paragraph another way: "Some analysts questioned whether the father-in-law's steps to prepare a shotgun wedding was an effort to put more pressure on the boyfriend..."If no agreement is reached between the government and Chrysler’s lenders, a nasty legal fight could emerge in bankruptcy. The creditors’ claims are backed by most of the company’s collateral, including plants, brands and equipment, and the senior lenders will argue that they have first claim on those assets — even over and above the government’s debt....
Some analysts questioned whether the Treasury’s steps to prepare a bankruptcy case were an effort to put more pressure on lenders, with which it has exchanged proposals meant to reduce Chrysler’s debt. Chrysler faces an April 30 deadline from the Treasury, while G.M. faces a June 1 deadline in its own efforts to draft a new restructuring plan.
This is an administration that is clearly hungry for power, and which clearly intends to use that power for political purposes. Why won't they allow banks to repay bailout money? They want to be able to control the banks, and thereby control the banks lending policies.
As the Wall Street Journal's Stuart Varney puts it:
Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can’t a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can’t special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit — until now.Obama is paying unions back for supporting his presidency by putting the UAW at the head of the line in bankruptcy negotiations. It is nothing short of political patronage. Do you seriously think there's even a chance that he won't similarly use his power over the banking industry to impose liberal policies and reward liberal constituents?
Obama shares a number of the underlying characteristics that would tend to define one as a fascist, as Jonah Goldberg saw at least as far back as February of 2008. But we're not talking about mere "underlying characteristics" or tendencies anymore. We're talking about overt fascism. Sheldon Richman defined fascism as follows:
Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”–that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.What the hell else are you going to call what Obama is doing but fascism?
Fascism came out of the political left; and liberals are leading us right back into a fascist hell all over again.
Which leads to the last observation: the suicide-pact that the Obama adminstration is forcing onto Chrysler is a microcosm for the suicide-pact that our society and our country are going to experience. This government takeover of the American way of life won't just result in a fascistic redefinition of America. The federal government and federal reserve have committed over $12.8 TRILLION so far in bailouts and stimulus. And we're nowhere near done with this madness, because our leaders believe they can sepnd their way out of debt. Massive inflation - and a death spiral - will necessarily follow.
You really . . . uhhhh . . . really paint a picture . . .
'nough said!
The very costs that sank Chrysler and GM. Makes my head explode!
If I were running Chrysler, I’d run to court NOW to file a real bankruptcy before Furer B. Hussein can impose anything.
Sorry for my graphic “paint job.” I was speaking metaphorically.
The 500 pounds are the massive cost structure that Obama refuses to let the auto industry shed.
The rabid face-chewing chimp is the UAW.
And neither make a potential “bride” like Chrysler very attractive to investors.
What happened to the Pension Benefit Guarantee Corporation (PBGC)? When a company declares bankruptcy, the PBGC steps into take over the pension. Normally pension benefits (especially for high earners) are sharply reduced when taken over by the PBGC. Witness the airlines, steel companies, and many other industries in which many companies have gone into bankruptcy. Has the current regime declared the end of the PBGC? Can every company expect the same treatment of their unfunded pensions?
This deal is pure payola. The UAW was a big time supporter of the rats. The taxpayer is forced to takeover the outrageous UAW pensions and retiree health care. Every rat supporting this deal should be in the slammer.
We’ve entered a whole new ballgame.
Like you say, this is pure political payback. This is the Chicago machine come to the White House.
We’re seeing it on multiple levels. For instance, it’s going on right now over the politically-motivated attack on the Bush Adminstration’s anti-terror policies. This stuff had never been done: Eisenhower didn’t prosecute FDR for interring Japanese-Americans or for firebombing Dresden and Tokyo; nor did he prosecute Truman for dropping two atomic bombs on Japanese civilian-populated areas.
Nixon didn’t prosecute Kennedy or Lyndon Johnson for their involvement in Vietnam or any of the decisions that were made.
Bush didn’t prosecute Clinton for his own administration’s role in sending captured terrorist suspects to countries we KNEW would torture them.
We’re in the clear blue skies of liberal fascist tyranny in the name of being the nanny state utopia liberals have sought to impose for years.
does anyone remember what happened at the motor factory in ATLAS SHRUGS when they decided to become a collectivist enterprise??
I guess its going to be Chrysler
Just because it’s pre-packaged doesn’t mean it will pass. There IS risk here to the obama administration and to the UAW.
With the current contract Chrysler has a negative net value. The only three options are:
1. Chrysler is dissolved
2. Chrysler ownership is retained by the government
3. Chrysler ends up owned by the UAW.
I think number three is the most likely. There is a slight chance that the government will throw in a few billion extra "free of all strings" (cough, cough) except for the UAW contract to help someone else buy it, but I doubt that anyone is stupid enough to pick that up after how the government has changed the rules on the banks.
Now a question: If the UAW owns Chrysler, how can they be be seen as unbiased among the car companies when negotiating? Will they have to split into two different sections, one to own Chrysler and one to represent the workers at Ford and GM?
Good analysis. Don’t disagree.
Fascism seeks to maintain some semblance of private ownership - even though that ownership be a shell with the government in near total power.
Obama will, of course, want fellow leftwing ideologues to be in place for day-to-day operations. Who better than the UAW?
No private investors are going to want to touch this turd.
Obama has imposed a suicide pact on America.
I vote for option #1: Chysler is dissolved. Seems the best. Somone might buy the good parts: Jeep brand, Dodge Truck. Whoever buys certainly WON’T buy contracts, pensions. The brands can live this way, which is best for consumers.
Chrysler, GM, and (soon) Ford should be allowed to file their OWN bankruptcy filing under longstanding American law so that they can reorganize and relocate to right to work states.
Why are they pushing for Chrysler to declare bankruptcy, but didn’t seem to want GM to do the same?
Suzi,
Actually, Obama IS pushing GM to consider bankruptcy.
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/01/AR2009040103718.html
Obama wants GM to split in two (so he can presumably control the half that still has any potential).
Oh, I was thinking that That One and the Unions didn’t want bankruptcy, because that would trigger the need to renegotiate the Union contract, and presumably threaten their gravy train.
I think that the Obama people think they can control the auto industry whether they go bankrupt or not.
They are essentially saying they intend to meddle with the bankruptcy proceedings anyway, according to the article I cited. So they can get their pound of flesh that way.
The other evil that is still to come is card check. If THAT crap passes (and the Dems can alter procedures to ensure it does), there’s no “renegotiating.”
Obama doesn’t want to keep pouring government money into the auto industry because he knows that is unpopular; he simply wants to control what they do, how much they pay, and what kind of cars they build.
So he's a National Socialist, in other words, a FASCIST!
The US flirted with fascism for the first 40 years of the 20th century - and liberals/progressives were at the forefront.
Now they are bringing it back.
Big government and totalitarianism go hand in hand.
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