Granholm: Bailed-out banks killing Chrysler

[Bozita]

Source: Detroit Free Press

Granholm: Bailed-out banks killing Chrysler
BY CHRIS CHRISTOFF • FREE PRESS STAFF WRITER • APRIL 22, 2009

LANSING — Gov. Jennifer Granholm joined those denouncing creditors of Chrysler LLC for their unwillingness to make concessions on outstanding debts, specifically targeting financial institutions that have accepted loans from the federal government.

Among Chrysler’s chief lenders are JPMorgan Chase, Citibank, Goldman Sachs and Morgan Stanley. They have asked for 40% ownership and a seat on the Chrysler board of directors in exchange for reducing their debt from $6.9 billion to $4.5 billion.

“Who knew that bailing out the banks would mean that they could kill the auto industry,” she told reporters at an unrelated event. She said the livelihoods of thousands of families are in the balance.

The institutions are playing “a very risky game” by proposing what amounts to a windfall for them, rather than accepting a market-based settlement proposed by the Obama administration.

Read more: http://www.freep.com/article/20090422/BUSINESS01/90422042/Granholm++Bailed-out+banks+killing+Chrysler

[w4rma]

1. Let the big banks fail!!! (nt)

[liberal N proud]

5. If you think unemployment is bad now - - wait

If the big three fail, look out, 10% unemployment by modern numbers will be considered low.

[Old Michigander]

15. Unemployment in Michigan

The unemployment rate in Port Huron, Michigan is 24.6%. Highest since 1933.

[No Elephants]

2. Will bankers replace televangelists, Cheney, Congress, etc. as the least loved folks in the nation?

[sarcasmo]

4. IMHO, it has already happened.

[Vidar]

3. Well done, Governor.

[earthside]

6. Chrysler was dying ...

... long before this current crisis hit.

Then they picked Nardelli for CEO -- talk about a death wish.

I blame the banks, but Chrysler's demise has been in the cards since Daimler bought-in then sold-out.

[Romulox]

7. If AIG owes a "counterparty" money, the US taxpayer pays it at 100%. Why the difference here?

:shrug:

[hugo_from_TN]

11. Chrysler can't afford to pay the banks at 100%

[Romulox]

12. Neither can AIG. I asked for why the DIFFERENT handling in this case; the similarities are evident.

[hugo_from_TN]

13. I don't know, but since I don't think taxpayers should be paying these debts

at 100%, I'm OK with this decision.

It's a pretty messed up situation with taxpayers bailing out both sides of this relationship.

[Romulox]

14. LOL. "Should" isn't really the operative word here. "Are" is...

As in, the US taxpayers are paying AIG's "counterparties" off at 100%. Still trying to figure out what makes Chrysler's bondholders so different...

[notadmblnd]

19. tax payers are going to pay one way or another.

So you can jump for joy when they go bankrupt. But guess what? You'll get to support all the people that lose jobs when they go on the public dole. Retirees will lose health, pension for a start, then the trickle down effect. More foreclosures, suppliers going bankrupt, more layoffs, more people on the dole. McDonald's, Burger King, Wendy's and Taco Bell will cut back, more people on the dole. No more health care, insurance companies start having problems (they won't get their premiums), more layoffs, more people on the dole. More people not able to afford health care.... cutbacks in the medical fields.

Are you beginning to see the picture here?

[RedCloud]

23. Super rich should be taxed at 1000% to pay off these debts.

It's their kind that did it. Stop robbing the rest of us blind, with your high priced cars, your way out of line mortgage plan and then steal our tax dollars?

Oh, I almost forgot and start huge wars that we pay off too with our lives while you profit, you damn master bators of war.

[Kokonoe]

8. Why would they care if the investments fail.

There is plenty more TARP to go around.

[brentspeak]

9. Goldman, Chase, Citi, MS: Wall St. loan sharks just doing what comes naturally to them

[Romulox]

10. Right. But the gov't has had ZERO problem handing these guys taxpayer $$$ up to now.

Why is the Chrysler situation so different? My guess? This is an opportunity to break the UAW...

[blue_onyx]

16. "This is an opportunity to break the UAW"

That's what it's all about and I don't understand why the Dems are going along with it. The unions have been strong supporters of the Democratic party.

[Romulox]

17. It's Obama's grand crapshoot: if he can win over more conservative voters in sunbelt states

he doesn't need the industrial midwest anymore. :shrug:

[blue_onyx]

18. Well, I hope Obama knows what he's doing

I would hate for MI to vote for President Palin in 2012.

[saigon68]

22. "This is an opportunity to break the UAW"

Absolutely

Its a pesky union

Imagine wanting a fair wage--</sarcasm>

[KamaAina]

20. Could this be "empty creditors" at work?

"Empty creditors" have hedged their exposure to struggling companies (like Chrysler) through derivatives such as the dreaded credit default swaps. Thus, they have no incentive to see the companies through the long, drawn-out Chapter 11 process, and would just as soon see them stripped for parts. This could well be a large part of the whole problem.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=5505552&mesg_id=5505552

:grr: :banghead: :argh:

[fujiyama]

21. The banks ultimately deserve most of the blame

but Chrysler has been managed poorly since Daimler took it over and basically made of a mess of it.

Cerberus has been even worse in their treatment. Chrysler has by far the worst line up of any domestic automaker and they don't have anything good down the pipeline either. They don't seem to have focused much on fuel efficiency or reliability (at least GM and Ford have made efforts and made gains in both areas). I just see failure written all over it.

I will never, by the life of me, understand why in the hell Nardelli was brought to manage this company after what he did at Home Depot. Stupid. Stupid. Stupid. But what else do you expect from a three headed dog at the gates of hell?

It's too bad that due to all this insanity and incompetence thousands more will struggle in an already depressed economy.