Chrysler is going to be a loose loose.

[Fieldmouse]

Chrysler will be a loose loose situtation with labor owning the majority stake. One only has to look no farther than Weirton Steel to see what happens when labor is given the keys to the piggy bank. The union workers bought that steel mill and instead of prudent investments to better their position they choose the cash in their pocket. Chrysler will end in the same way. Interesting to note, Rush Limbaugh predicted this outcome many months back. He said the end result will be giving the company to the unions. Obama's plan is to give the nations wealth back to it's rightful owners. Not the ones who risked everything toearn it, just the ones who vote for him.[:@]

It's a real shame for Fiat. I like my83 Pinninfarina I owned many years ago and would buy another one given the chance. Despite all the rumors, Fiat can make some real nice cars that are fun to drive.

[DougMD]

Fiat's the only decent owner in the bunch. Unions, Barney Frank and Obama will run it into the ground and taxpayers will be on the hook.

[Lemaitre]

It is by no means certain that Chrysler will emerge from bankruptcy. The media is reporting that Chrysler is closing its plants effective Monday and will not produce any new vehicles until the legal issues are settled. Chrysler says it only expects the bankruptcy court proceedings to last from 30 to 60 days and they can then begin production again. I am not a lawyer but it is hard for me to imagine a bankruptcy as large and complex as this one being adjudicated in less than 60 days. The secured creditors seem to be very determined to be made whole and appear to think they can do better by having Chrysler liquidated than accepting the $2.25 billion the Government is offering them to forgive the $6.9 billion that Chrysler owes them. If this drags on for months and Chrysler can not resume production during that time it may just fade away.

It will be even uglier with GM in a month. The Creditors want 58% of the company in exchange for the $27 billion in outstanding GM bonds while GM has offered a plan that would give the U.S. Government 50%, the UAW 39%, the bondholders 10% and current stock holders 1% of the company. Finding a compromise between such divergent positions will not be easy. Now with Chrysler we have the precedent of creditors ready to take their chances in bankruptcy court rather than accept pennies on the dollar for what they are owed. GM will also be difficult because many GM bondholders depend on interest payments from those bonds. If they they exchange those bonds for stock in GM the former bondholders will not only have received about 5 cents on the dollar at GM's current market value but will also be getting shares that do not pay a dividend and are not likely to for a long time, if ever. The loss of the interest income and nearly all the value of their securities will be a powerful incentive for the bondholders to threaten to drag GM into bankruptcy court in the hope that the Government will come up with the $27 billion to make them whole and allow the GM restructuring to move forward.

[Fieldmouse]

Lemaitre, you make some good points. For those reasons as well as for Ford, its the right way to go and send them through bankruptcy.