Showing posts with label chrysler. Show all posts
Showing posts with label chrysler. Show all posts
Friday, July 22, 2011
Surprise! (Not.) Chrysler's going to cost taxpayers
Word's out today that with the federal government unloading its (our) shares of Chrysler, taxpayers are likely to lose up to $1.3 billion. Fiat will own more than 58% of the company after the dust settles, and the Democrat-friendly auto workers union will own the rest. As for those shareholders and bondholders who were left with nothing because of the Obama-brokered deal? Obama and Democrats have one word: Tough.
Wednesday, May 06, 2009
Obama's Gift to Fiat and the UAW
The Obama administration has conducted a power grab that is unprecedented. They attached themselves to Chrysler, and now Chrysler is about to go under. Robert Robb explains it clearly in his column on RealClearPolitics.com.
Here's the situation in a nutshell (and the point of which was the subject of a vigorous "discussion" I recently had with an Obama fan): "Chrysler has $6.9 billion in secured debt. Under the law, secured lenders have the first claim on the assets of the debtor in the event of non-payment.
"The Obama administration is attempting to muscle past this law. Under its proposal, the health care trust of the auto workers' union, an unsecured creditor, would forgive 57 percent of what Chrysler owes it, and receive 55 percent of the company's equity in exchange. The federal government would forgive about a third of what it would loan Chrysler and receive 8 percent of the company's equity. Fiat would pay nothing for its 20 percent initial ownership.
"The secured creditors, with the first claim on Chrysler's assets, were asked to forgive 70 percent of what they are owed and receive nothing in equity. (Emphasis mine - kw) When they refused and forced the company into bankruptcy, they were excoriated by Obama - a shameful act by a president who pledged to uphold the law, not make it up as he went along."
Here's the situation in a nutshell (and the point of which was the subject of a vigorous "discussion" I recently had with an Obama fan): "Chrysler has $6.9 billion in secured debt. Under the law, secured lenders have the first claim on the assets of the debtor in the event of non-payment.
"The Obama administration is attempting to muscle past this law. Under its proposal, the health care trust of the auto workers' union, an unsecured creditor, would forgive 57 percent of what Chrysler owes it, and receive 55 percent of the company's equity in exchange. The federal government would forgive about a third of what it would loan Chrysler and receive 8 percent of the company's equity. Fiat would pay nothing for its 20 percent initial ownership.
"The secured creditors, with the first claim on Chrysler's assets, were asked to forgive 70 percent of what they are owed and receive nothing in equity. (Emphasis mine - kw) When they refused and forced the company into bankruptcy, they were excoriated by Obama - a shameful act by a president who pledged to uphold the law, not make it up as he went along."
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