Obama Vows Swift Overhaul As Chrysler Enters Bankruptcy

Washington Post ^ | 4/30/09 | Peter Whoriskey, Brady Dennis and Kendra Marr

[Nachum]

Chrysler, the nation's third-largest automaker, filed for bankruptcy protection yesterday, with President Obama promising that court relief would give the company a "new lease on life."

The administration's efforts to avert a bankruptcy filing were frustrated by some hedge funds, which Obama referred to as "a small group of speculators," that rejected the government's final offer to settle their claims against Chrysler out of court.

Now largely under government control, Chrysler will seek in court to strip itself of its overwhelming debts. Then, according to the administration plan, the company will get roughly $10 billion in new government aid and be merged with Italian automaker Fiat.

[Nachum]

But a number of hedge funds and other investment firms, who had invested in loans to Chrysler, refused to accept the government's final offer of 33 cents in lieu of every dollar owed. Their rejection precipitated the bankruptcy filing, administration officials said.

The nerve. They wouldn't take Obama's generous offer of 33 cents on the dollar....

[Nachum]

The List, ping

[nikos1121]

Sounds like Mitt Romney was right months ago when he said it would be best to take bankruptcy and come back a better company.

First 100 Days? When things start to unravel with this light weight president... we have... he will fall like a house a cards...

It will be precipitated by an unprecidented attack on our country...probably nuclear.. whereby tens of thousands of our people will be killed...

[Jim from C-Town]

I certainly hope not

[Nachum]

It will be precipitated by an unprecidented attack on our country...probably nuclear.. whereby tens of thousands of our people will be killed...

God forbid.

[highpockets]

frustrated by some hedge funds, which Obama referred to as "a small group of speculators," that rejected the government's final offer to settle their claims against Chrysler out of court

How dare these profiteers resist Zero's final offer!

If the bankruptcy Judge rules their investments to be of greater value than that offered by Zero, will the One call him ignorant of capitalism?

[FlingWingFlyer]

Why the rush? Nobody wants the “green” cars they’re going to be pumping out anyway. Especially after Boy Wonder and Algrog pass their Cap’n Tax scheme.

[Nick Danger]

It all depends on what the meaning of "Chrysler" is. To read this article, you'd think that Cerberus Capital used to own Chrysler, and now the Fedrel Gubment owns it. And so they do. They own "Chrysler."

Now let's talk about the land, the buildings, the machinery, the equipment, etc. that Cerberus Capital was using to make stuff under the name "Chrysler." They didn't own any of it. They were allowed to use it by... wait for it... the "small number of speculators" who loaned Cerberus Capital the $20 billion it used to buy Chrysler from Diamler-Benz. Those guys have the so-called "senior debt" that is secured by a lien on the land, the buildings, the factories, etc.

Obama might think he now owns Chrysler, and the WaPo might think that Obama owns Chrysler, but the guys with unobstructed liens on all the assets just went into bankruptcy court... where under law, the judge must honor their claims first. Once they're done, Obama can call the shots about what to do with the staplers, the chairs, and the Pitney Bowes machine.

[sheik yerbouty]

Obama will resurrect the Trabant..

[Las Vegas Ron]

Socialist dumb f*** Everything this pos and his administration is doing is un Constitutional, why is he still in office?

Sorry for the foul language but I am so pi$$ed at what he is doing to this Country. Just unfreaking believable

[OnTheDress]

Going forward, who is going to buy a Chrysler or A Government Motors product?

I have only, ever, owned GM.

Never another, ever again!

0bama has seen to that.

[When do we get liberated?]

nah, chrysler would screw that up...Everything after the Challenger was a mess.

[FlingWingFlyer]

There ya go! I was going to post a pic of one of them last night. I was afraid most wouldn’t get it.

[gswilder]

Unbelievable how Obama is taking control of a wide swath of private business. He is basically raping these bond/debt holders with both Chrysler and GM. These debt holders are investment firms for teachers unions, average workers, 401Ks, retirees, and other private citizens. GM for example, 25% of this debt is retirees and GM is offering them 11 cents on the dollar.

In the Chrysler negotiations, he twisted the arms of the large debt holders, all who had taken TARP money. The holdouts were the non-TARP financial institutions.

Basically Obama failed on Chrysler and could not get a deal done. So he basically gave Chrysler to Fiat, raped 60% of the debt holders, gave 55% to the UAW, and still gave them another $8 billion bailout. Then goes out an announces this massive failure of his like he did something great.

Obama is such a failure. No experience. He can talk from a telepromtor and that is all.

[Spktyr]

I hate to point this out, but by blindly buying GM, you enabled the unions that bought the presidency, you enabled GM’s terrible quality and worse designs that eroded market share, and worst of all you propped up the Democrats and their failed union states.

[sheik yerbouty]

He’ll soon make a speech saying that our 401Ks are “in a better place”..

[Oldexpat]

Bond holders are hardly speculators.

[Lmo56]

Dollars to doughnuts that there will be at least 1 bondholder that files suit - alleging coercive tactics by the government ...

[sheik yerbouty]

I was referring to Obammy’s whole attitude.

[Trod Upon]

I will never buy another union made product. Not ever. I’d rather give my money to the Chinese.

[prismsinc]

This is sad, terrible, but necessary. We need to help bring down any company that took bailout funds, regardless of whether they wanted to or not. All these companies are now becoming parasites on our society, and they must die so America survives.

These companies were the greatness of our predecessors, and I admired them, but unfortunately, we must now close that chapter of our history and begin anew.

[celtic gal]

What happens when, after all this is said and done, and the Unions essentially own 80% of this car co...and the unions demand such high wages and benefits for the employees, and they design and produce such icky cars and trucks that no one wants to buy them and the company goes into well foreclosure...then what? Is 0bama going to raise our taxes to pay for the soon to be unemployed employees?

[taxesareforever]

“Obama Vows Swift Overhaul As Chrysler Enters Bakery Seeking Dough”

[FastCoyote]

“new lease on life.”

I think they were hoping for more than a lease with Obama as the Landlord.

[pallis]

Hearing a president do interviews like he is the CEO of Chrysler and GM is a little unnerving. 0’s Fascist attitude should set off a few alarms among our pop media, but they are cheering him on, good little Nazi soldiers that they are.

[EVO X]

Hearing a president do interviews like he is the CEO of Chrysler and GM is a little unnerving.

Just a little warm up until congress appoints him health care CEO.

[Sgt_Schultze]

Already spotted in secret road tests ...

[Wyatt's Torch]

You got it. From today's Wall Street journal:

As part of its turnaround plan, Cerberus had Chrysler mortgage most of its crown jewels -- plants, real estate, machinery and intangible assets like patents and the Jeep brand name. Using those assets as collateral, Chrysler borrowed $10 billion.

When the rescue effort collapsed late Wednesday, the sticking point was debt. The government proposed to pay creditors about 33 cents on the dollar, but half refused to go along for the ride. President Barack Obama threw in the towel. The company filed for Chapter 11 bankruptcy protection on Thursday. The auto maker that emerges will likely be smaller, designing trucks and sport-utility vehicles and making cars developed by Fiat.

Chrysler's filing sounds a conclusive rattle in the long, painful decline of Detroit's Big Three auto makers. Like its age-old rivals General Motors Corp. and Ford Motor Co., Chrysler suffered from costly and inflexible union contracts, poor quality, bad management decisions and an economic downturn that put the brakes on consumer spending. In Chrysler's case, the seeds of its downfall, including the piling on of debts that proved to be overwhelming, were planted unknowingly in crises of the past.

Cerberus's decision to borrow against company assets was a tried-and-true method of raising cash in tough times. Ford, in fact, is in better shape than GM and Chrysler because it raised billions in 2006 by mortgaging its plants. As people inside Cerberus see it, the borrowing plan would have posed no problem for Chrysler but for the meltdown in financial markets.

[sheik yerbouty]

It really is a nefarious plot!

[sheik yerbouty]

He is worse than that. His intentions towards America are anything but good..