TREASURY dept prepares Chrysler's......

[MOUNTAINORACLE]

Would someone please explain to me how the US Auto Industry is NOT nationalized.
1. Administration fires President of GM
2. Treasury is preparing the bankruptcy for Chrysler
3. US taxpayers have to pay for the retirees benefits

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http://news.yahoo.com/s/nm/20090423/...ysler_treasury

U.S. prepares bankruptcy filing for Chrysler: report

DETROIT (Reuters) – The Treasury is preparing a Chapter 11 bankruptcy filing for Chrysler LLC that could come as soon as next week, The New York Times reported on Thursday, citing people with direct knowledge of the matter.
The Treasury has an agreement in principle with the United Auto Workers union to protect pensions and retiree health care benefits as a condition of the bankruptcy filing, the paper said.
Italy's Fiat would finalize its alliance with Chrysler while the U.S. automaker is under bankruptcy protection, the paper reported.
Chrysler has until April 30 to complete its partnership with Fiat and win concessions from its first-lien lenders and the UAW, or face a cut-off of government funding and a potential bankruptcy.
The Times said U.S. and Canadian governments were prepared to provide the financing that Chrysler needed to operate while under bankruptcy protection.
Chrysler was not immediately available for comment.
(Reporting by Soyoung Kim, editing by Leslie Gevirtz)

Oracle

[PeaceAndLove]

Toyota and Honda plants in the States are not being taken over by the government. Also, auto parts suppliers have not asked for a bailout. (that I know of)

Do you think the government actually wants to keep these companies? Who will they be making cars for?

[crlovel]

I just want to thank the US Gov't for ensuring that I never buy an American car again.

[wa3ra]

The S will HTF for the suppliers in a few weeks, when the manufacturers shut down production for 9 weeks (GM), 11 weeks (Chrysler) and 3 weeks (Ford)...

[Ramtuff]

The S will HTF for the suppliers in a few weeks, when the manufacturers shut down production for 9 weeks (GM), 11 weeks (Chrysler) and 3 weeks (Ford)...

And it's not just the suppliers that most people think of either, such as body panel and trim producers. The steel plastics, rubber and a host of other industries will be affected. 1 in 9 jobs in this country are tied to the auto industry in some way. The collapse of the domestic auto industry would be catastrophic.

[Brick]

Someone tell me what would be wrong with Chrysler and GM reorganizing as employee owned with the Unions buying out the company or at least a controlling interest in stock outright?

Thereafter if they fail it's thier own fault. Or are they waiting for the government to take the company over and hand it to them as a gift?

[Ramtuff]

Someone tell me what would be wrong with Chrysler and GM reorganizing as employee owned with the Unions buying out the company or at least a controlling interest in stock outright?

Thereafter if they fail it's thier own fault. Or are they waiting for the government to take the company over and hand it to them as a gift?

Well, there has been a lot of talk about trading debt for equity with the unions. My basic problem with that is that the unions are barely budging now on concessions to keep these companies in business...they'd end up driving them right into the ground if they had a majority share of them. If they aren't willing to give up a little now to secure employment for their members, then they really don't give a shit...the union heads will walk away with their millions and say F everyone else.

The biggest problem the Big 3 have are the legacy costs from retired employees. GM spends 1 BILLION a month on legacy costs. That's insane. And to top it off, GM's been bloated for far too many years. They need to trim production and cut down to three brands...Chevy, Cadillac, and Buick or Pontiac. GM has been very slow to slim down, and now they're caught with their pants down.

Chrysler needs to slim down too, but not to the extent of GM. When Cerberus bought Chrysler in 07, it was a mess. Chrysler was a VERY, VERY profitable company in 98 when Daimler bought it, and they proceeded to rape the company over the 9 years they owned it. But Cerberus has been in the process of reorganizing and increasing product quality/innovation since they've purchased it. These changes take time though.

Ford got lucky, and they managed to mortgage just about everything they own before the credit crunch hit. That's why they haven't asked the government for a loan (the money given to GM and Chrysler are loans, which have to be repaid, unlike the bailout of wall street). If the economy doesn't pick up, they'll be standing there with their hand out too.

The one advantage the foreign companies have over our domestic brands, is that they don't have the legacy costs to attend to, so their cash burn is much less. But they're hurting too. With the economy as it is, and the credit freeze (gee, the TARP money was supposed to free up credit, but that didn't happen), everyone's sales are down 35-45%. I read a few weeks ago that Honda and Toyota were contemplating asking for some financial aid from their own government. What we're seeing right now isn't a Big 3 problem, it's a global problem.

I'm sorry for writing a book here, but I'm very incensed over this issue. Every time I turn around, someone else is saying just let these companies fail. If that actually happens, the people who say that will be very sorry. These companies are the largest manufacturers of tangible goods in this country, and if they fail, you'll see atleast 3 million jobs lost the first year, with around another 1.5 million the next. It will cripple this country. There's not one of us that won't be adversely affected by it.