Chrysler under Chapter 11...finally

[Defiant]

As if owning a Chrysler wasn't bed enough, they will now own FIATs.

 

[laserspeeddemon]

I kept saying this. These companies NEED Chapter 11. Keep in mind this isn't a Chapter 7, sell off everything you have to get what you can get. This is the opportunity to reorganize, but more importantly it allows the company to BREAK THE CONTRACTS OF THE UNIONS! Executory contracts may be rejected if canceling them would be financially favorable to the company and its creditors.

With the contracts broken, all 3 would be able to get back on their feet.

 

[DarthBulk]

But, can they do that under this bankruptcy filing? From what I read, it sounds like the Obama administration is making this a special case filing, in which the Union contracts would be the last thing to go, if at all. I think this should have been a straight Chapter 11 filing with no government interference, so what you said is exactly what would happen. That IS what they need, more than anything else.

 

[the_mork]

Exactly, more union concessions are off the table straight from BO's mouth we heard that the unions have sacrificed enough. This surgical bankruptcy is to try and remove the debt and overhead associated with it in order to try and give Chrysler a clean slate, not to fix the underlying problems.

Furthermore even if it were an option it wouldn't happen because the union has a controlling interest. The union owns 55% of Chrysler which is 4% more than they need to in order to completely control the company and 55% more than they should/deserve to own.

 

[TunaTalon]

The unions do not yet own 55% of Chrysler. The unions are not entitled to 55% of Chrysler by any existing contract. That is what the Obama Administration is trying to make happen.

There are bond holders representing investors with 401K funds that have "preferred" contracts that call for them to be paid 100 cents on the dollar before the unions get the first penny. The holders of common stock should not get the first penny until creditors such as the unions are paid. That's the law per existing contracts. However the unions have more juice in Washington than I do so the administration is using good old fashioned Chicago thuggery to take money from my retirement funds and use it to allow the unions to get control of Chrysler.

When approaching retirement I moved some of my 401K to low risk bonds to trade off lower returns for lower risk. I never imagined that contract law would be in the style of North Korea where the word of the Dear Leader overrides the law.

 

[Bud92gsx]

I just heard that pontiac is done making vehicles too, Is there any truth to these rumors?

 

[the_mork]

IIRC GM is cutting Pontiac as part of its restructuring plan and they may be cutting Saturn as well though I'm more fuzzy about that.

 

[DarthBulk]

GM Officially Kills Pontiac...To be Phased Out by the End of 2010! (The Torque Report)

It is official, Pontiac is dead.

 

[Defiant]

So, no Solstice Coupe for you!

Brainless bastards.

 

[the_mork]

Yup, the Solstice was my favorite new GM car and I thought it had a lot of potential as a fairly mean street machine once everyone's warranties were finished. Oh well, GM wont kill the platform it will just go somewhere else. I'm not sure how I feel about a Buick roadster though...maybe it will be an Izuzu.

 

[Defiant]

The badges on cars haven't meant shit for forty years, if not more.

The automotive world is being hollowed-out like a cattle mutilation, and the business is as dead as that cow.

 

[DarthBulk]

I hope something good emerges from that mutilation, but I am not holding my breath.

 

[the_mork]

So I've been hearing recently that the UAW wants to sell their share in Chrysler in order to fund their health benefits.

I guess I just don't understand anymore what it takes to make the world run. Why did the union get a 55% share in Chrysler when they only held 10% of Chrysler's debt without putting anything more up for it? Why are they protected from losses in Chrysler's bankruptcy when other creditors are asked to give up almost everything?

I thought that the point of the union receiving 55% of the company was to give the union a stake in the product and success of the company, apparently though it was just to give them some free money that comes out of the pocket of everyone who has a 401k or is a taxpayer.

The difference in treatment of the auto companies, the unions, their creditors, and the American taxpayer in this situation has been IMO the saddest part of this whole recession and I believe that there is a subversion in this instance of the rule of law.

If Chrysler can't break their contracts with the unions then I want them to fail completely and be liquidated. If they can then I know that there are a lot of Americans willing to "sacrifice" to work at wage and benefit levels that the union wont.

 

[xioca]

Too bad the UAW is getting special treatment from the Left'ests in office.

 

[TunaTalon]

So I've been hearing recently that the UAW wants to sell their share in Chrysler in order to fund their health benefits.

Here’s a thought experiment for you.

Imagine that you are in a meeting of big time money managers and everyone is tired and bored so you say:

I know, let’s buy some Chrysler stock. The company is managed by the UAW and the US government, what could go wrong?

 

[the_mork]

I guess I'm not following...

I would imagine that everyone would call me an idiot and I'd get fired. What exactly is the point of your scenario though?

Are you trying to express that Chrysler wont be worth much? I think we know that already.

 

[TunaTalon]

You got it mork. Except you would not have been fired, everyone would have had a good laugh and then gone back to real business invigorated by the absurdity of the remark.

Everyone knows that a company controlled by the UAW is not worth much. So what is really going on? My guess is that the new administration is just winging it.

 

[blackGSX2g]

So I've been hearing recently that the UAW wants to sell their share in Chrysler in order to fund their health benefits.

I guess I just don't understand anymore what it takes to make the world run. Why did the union get a 55% share in Chrysler when they only held 10% of Chrysler's debt without putting anything more up for it? Why are they protected from losses in Chrysler's bankruptcy when other creditors are asked to give up almost everything?

I thought that the point of the union receiving 55% of the company was to give the union a stake in the product and success of the company, apparently though it was just to give them some free money that comes out of the pocket of everyone who has a 401k or is a taxpayer.

The UAW got their share in Chrysler under a deal because Chrysler couldn't front the cash necessary to fund their requests. They gave up shares of the company as a concession. Obviously the UAW will sell at the most profitable moment. They are not protected from losses in Chrysler's bankruptcy, they just figured the majority share would be worth more than other options.

Unfortunately the union has more pull with the company than salaried employees that have been around for 30+ years. As such, the union is one of the first priorities of the company. I wwould love to see an equalisation of wages amont automakers..$29+/hr is rediculous for untrained labor.

 

[Defiant]

How does bolting on fenders qualify you for $90K a year? How is it a family-supporting career path?

The unions have become the problem they were formed to fight. We can only hope the robots never unionize.

 

[xioca]

We can only hope the robots never unionize.

And call themselves sky net or use us as batteries!

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[My1GLaser]

How does bolting on fenders qualify you for $90K a year?

The unions have become the problem they were formed to fight.

I couldn't agree more. They had their place when workers were being taken advantage of and working conditions were unbearable after the Industrial Revolution.

But now it just breeds laziness, complacency, and inefficiency in workers because there is little to no repercussion. It doesn't take a human being long to evolve into a lazy SOB if there isn't a reason to have a good work ethic.

 

[the_mork]

The UAW got their share in Chrysler under a deal because Chrysler couldn't front the cash necessary to fund their requests. They gave up shares of the company as a concession. Obviously the UAW will sell at the most profitable moment. They are not protected from losses in Chrysler's bankruptcy, they just figured the majority share would be worth more than other options.

But Chrysler gave the unions a concession when they wouldn't give concessions to their creditors. The UAW should not have been the first in line.

Also they are protected one way or another. If Chrysler fails to pay them then the government takes over their retirement and health benefits. If Chrysler fails it will be all of us paying for this. I still cannot understand how that happened.

How does bolting on fenders qualify you for $90K a year? How is it a family-supporting career path?

The unions have become the problem they were formed to fight. We can only hope the robots never unionize.

They could hire the guy down the street that does it for 40k/year, works more hours, doesn't cost the same in benefits, and can remove it and paint it too. There is a sickening problem with that scenario. Teachers are the next worst union. I've never had a teacher that didn't complain about being underpaid but apparently the average teacher in my area makes over 100k if you include benefits for 9months a year of work and we aren't exactly the highest COL area in the country.

And call themselves sky net or use us as batteries!

I don't mind as long as the matrix is nice.