Thursday, April 30, 2009

Chrysler bankrupt but wait...

it's not that simple as the BBC reports

You see Chrysler isn't going bankrupt, being wound up and sold. It is Chapter 11 bankruptcy.


US taxpayers will pour US$8 billion into the "new" Chrysler, to be 20% owned by Fiat, 8% owned by the US Federal Government, 55% by VEBA (union trust fund), 2% owned by the Canadian Federal Government and Ontario government jointly.

6 out of 9 member board will be appointed by the US Federal Government.

"No jobs will be lost in the short term" and No Chrysler plants in the US will close, says President Obama. So opportunities for efficiencies are where?

It already had a US$4.5 billion loan from the Federal Government.

The lesson is simple in the USA of Barack Obama - if you have a big enough business, don't worry, you wont take the consequences of bad decision making, everyone else will.


Oswald Bastable said...

How to built the American Trabant...

Mark.V. said...

Seriously, how does Obama expect FIAT to rescue Chrysler? Daimler Benz tried. It has very deep pockets and considerable technological skills and and it failed losing billions in the process.

Chrysler is coughing blood, FIAT is hanging on by its fingernails. Tying Chrysler to FIAT will be like tying a rock to the neck of a drowning man, both companies will go down the gurgler, taking a lot of taxpayer's money with them.