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Ear to the Ground

Chrysler Heads for the Chop Shop

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Posted on Apr 23, 2009
Flickr / Dr. Keats

The Treasury Department has cut a deal with the United Auto Workers to send Chrysler into bankruptcy while protecting retiree benefits, The New York Times reports. Fiat would be in a more favorable position to take a cut of the company once it’s in bankruptcy. Chrysler’s equity stakeholders are shaping up as the big losers in all of this.

New York Times:

The U.A.W., Chrysler and Treasury have reached agreements in principle that would protect workers’ benefits, people with knowledge of the negotiations said, and a similar agreement is expected to be reached as soon as this weekend with the Canadian Auto Workers union.

Once Chrysler emerges from bankruptcy protection, it would largely be owned by Fiat, the U.A.W., the Treasury and its lenders, these people said. A bankruptcy filing would likely wipe out existing equity stakeholders, notably Cerberus Capital Management, which took over the carmaker from Daimler in 2007.

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By archebald23, May 10, 2010 at 7:48 pm Link to this comment

Whatever happened to chrysler, 10 years ago they were at the top of their game, selling thousands of vehicles, millions of performance auto parts. The sudden rise might have gotten the best of them.

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By beeline, March 30, 2010 at 3:59 am Link to this comment

One would hope that now we are coming out of recession, car rental firms would be expanding their fleets and doing their bit to help the automotive industry. Yet it is still difficult to get car hire in France, Spain and other European countries at peak times.

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By mark, April 24, 2009 at 8:03 am Link to this comment
(Unregistered commenter)

Inherit the Wind:

I’ll bite.

If you can please reference articles re shortage of railcars and the inability of growers to get grain to market.

Would like to know more.

Is shortage attributable to spike in demand for cars? That is, bumper crops of grain out-stripped capacity to ship it, where capacity was otherwise adequate.

Is shortage attributable to neglect by industry to replace rolling stock as old cars wore out?

Is shortage contrived?

Re: Re-tooling idled auto plants to produce railroad cars

How long would it take to re-tool the plants and re-train the workers?

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Outraged's avatar

By Outraged, April 24, 2009 at 1:11 am Link to this comment

This is somewhat off topic but you have to check out this map of job loss across the country since Jan 07’.  Consider that we know not all unemployment is included in official statistics.  ( Of course, I suppose that could be said of 07’ also )  Just hit the green arrow button.  Shock and awe….. oligarchy-style. 

http://www.slate.com/id/2216238

I know Sen. Kennedy was a major force behind the Serve America Act and at this time a much needed program.

From the LA Times:

“Propelled by Sen. Kennedy and Republican Sen. Orrin G. Hatch of Utah, the act will deliver $1.1 billion to AmeriCorps this year, in addition to $200 million that the president’s economic stimulus act has funneled to the organization.

The funding will allow the organization to expand openings for AmeriCorps volunteers from 75,000 to 250,000 positions over the next nine years and to establish new areas of volunteer corps in healthcare, education, clean energy and conservation.

The legislation ties service to education, increasing the stipend paid to volunteers to $5,350, the same as that of a Pell Grant. It also creates a $50-million “social innovation fund” to provide matching grants to nonprofit organizations. And it establishes Sept. 11 as a national day of service.

Alan Solomont, chairman of the agency that oversees AmeriCorps, noted that interest in the program is growing: 17,000 applications were submitted online in March, triple the number recorded in March 2008. “We know that people want to serve, as witnessed by ‘the Obama effect’ of people answering the president’s call to service,” Solomont said in a conference call.

http://www.latimes.com/news/nationworld/nation/la-na-service22-2009apr22,0,5559222.story

Although I’m not quite sure that this article is “technically” accurate, since all of these programs in the past offered educational grants AND living expense stipends concurrently.  It doesn’t sound as if the new legislation changed that portion, but moreso expanded it.  The new booklet is not yet available.

So if you find starvation an uncomfortable reality…. this might be an option .... you may at least feel good about what you’re doing as opposed to working at some dead-end, slimy boss type venue for scavengers wages.

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By Inherit The Wind, April 23, 2009 at 3:21 pm Link to this comment

Here’s what I don’t understand:
1) Chrysler and GM are headed for bankruptcy.
2) They both have cars they can’t sell and big factories that are going idle, putting millions out of work.
3) Railroads are FAR more energy efficient.
4) But there is and has been a SEVERE shortage of R/R cars…Only passenger cars are new and…they are all coming from Europe!
5) Like something out of Ayn Rand’s “Atlas Shrugged” last year’s wheat crop couldn’t get to market because there wasn’t enough rolling stock to carry it!  No new freight cars have been built in 2 decades.

So…Why don’t we invest our taxpayers’ money in helping GM and Chrysler retool a portion of their production into making freight cars?
The nation needs them.
There’s a market for them.
They are FAR more green than GMC and Dodge Ram trucks.

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