Government Owns the Banks and the Car Company...
And yet is in charge of negotiating for both? This is a clear conflict. Because banks like JP Morgan and Citi took TARP funds, they are essentially government controlled. JP Morgan and Citi each hold debts for Chrysler, who is also operating on government bailout money and who also has to do what Uncle Sam tells it to do, namely, merge with Fiat.
According to the Wall Street Journal (via Powerline), the car czar (and let me just say - are we Russia? A Czar is a stupid thing to have, especially a car one) is negotiating between both sides, and asking that the banks cut what Chrysler owes them from $6.5B to $1B, with the banks getting nothing in return.
That's ridiculous to me. The banks have people to answer to, as well, and need to remain solvent so that we can all get back our TARP money (HA!).
But the bigger thing here, to me, is that the government is negotiating on behalf of the car company ... or are they? Under bankruptcy, the banks stand to recoup as much as 65% of their losses. So for the banks, at this point, bankruptcy is their best option.
But it's not in the best interest of ... the UAW. The government, in my mind, is not so much interested in the mean, awful, corporate car manufacturer, but in the UAW contracts and the pension and health care programs that are so bloated that they caused this mess in the first place. In stead of asking the banks to forgive their debt for nothing, the government should be changing the pension programs and requiring more stringent concessions from the UAW.
At this point, I'd love to see Chrysler go into a restructured bankruptcy. It'll be interesting to see the administrations intervention to keep the UAW contracts in tact.
According to the Wall Street Journal (via Powerline), the car czar (and let me just say - are we Russia? A Czar is a stupid thing to have, especially a car one) is negotiating between both sides, and asking that the banks cut what Chrysler owes them from $6.5B to $1B, with the banks getting nothing in return.
That's ridiculous to me. The banks have people to answer to, as well, and need to remain solvent so that we can all get back our TARP money (HA!).
But the bigger thing here, to me, is that the government is negotiating on behalf of the car company ... or are they? Under bankruptcy, the banks stand to recoup as much as 65% of their losses. So for the banks, at this point, bankruptcy is their best option.
But it's not in the best interest of ... the UAW. The government, in my mind, is not so much interested in the mean, awful, corporate car manufacturer, but in the UAW contracts and the pension and health care programs that are so bloated that they caused this mess in the first place. In stead of asking the banks to forgive their debt for nothing, the government should be changing the pension programs and requiring more stringent concessions from the UAW.
At this point, I'd love to see Chrysler go into a restructured bankruptcy. It'll be interesting to see the administrations intervention to keep the UAW contracts in tact.
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