No kidding. It could have been worse though. Imagine selling Chrysler to Peugot
You know what's really irritating is that the Canadian govt. hasn't gotten into the act. Chrysler is, after all, a Canadian company. That and Cerberus, a private equity ivestment firm, doesn't think enough of their own companies aquisition to put up some of the 30 bn they have in cash too get things turned around. I guess they have made up their minds about Chrysler's chances.
JC
Whoops. I guess I spoke to soon, although I don't see this as anything more than a holding effort whiule the US tax payer engages in the heavy lifting.
"In announcing an immediate loan of 250 million Canadian dollars, or $201 million, to Chrysler Canada on Monday, Tony Clement, the minister of industry for Canada, suggested that the company was on the verge of insolvency." "Very clearly if the money had not been flowed today, they would not have been able to make payroll," Mr. Clement told a news conference in Ottawa. "That was the stark choice we were faced with."
The governments of Canada and Ontario, which have been consulting with the Obama administration, more or less echoed the president's remarks, setting similar timetables and conditions for further government assistance to the two automakers.
While the two Canadian governments first offered assistance in December, Monday's loan to Chrysler was the first time that either Chrysler or G.M. had accepted help in Canada. Mr. Clement said that Chrysler's Canadian operation would be given a total of 1 billion Canadian dollars in bridge financing by the end of April.
The two automakers have asked for $10 billion in assistance from Canada. Currently, the governments are offering 4 billion Canadian dollars, or $3.2 billion.
============ It appears that the US government has again managed to put the taxpayer's on every side of the side of the automotive problem to absorb the losses.
Union/salary pensions -- indirectly through higher PBGC costs for the solvent pension plans, and directly through the taxpayer guarantees of the PBGC. Pensions capped at less than what the companies would have paid under the contracts. Employees lose much of their contributions from lower wages in the past years.
Retiree medical -- directly shifted to Medicare and the taxpayer. retirees lose much of what they paid for years ago.
Unsecured creditors -- many of these are major banks, but with much of that debt covered by CDS insurance. The little people with their savings invested will take it in the shorts, and many will need public assistance for example college tuition for their kids. Note that many of the major unsecured creditors with CDS bought the loans at a big discount, so have no incentive to help GM avoid b/k. Indeed, a GM b/k is to their advantage as they get
100 cents on the dollar.CDS default insurance, much of it written by AIG, and AIG now underwritten by the taxpayers.
Suppliers/vendors will fall like flies when the standard 90 and
120 days same as cash terms become 180 and 270 days less 50%. The taxpayer impact here will be through SBA and local economic development agency problems, particularly with the 2nd and third tier suppliers.It should be expected that when the books of both Chrysler and GM are finely blasted open by a b/k filing, and audited, much additional debt and questionable accounting will be revealed. A favorite ploy for the private investment firms is to get a huge loan against assets of the new companies they acquire, and then pay themselves a "special dividend" from the loan proceeds, while the company is on the hook for the loan. Better than a "bust out scam" because this is legal.
Unka' George [George McDuffee]
------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
pocket knife and maginfying len doesn't matter at work or not
============ At least Peugot knows when to make a change, and the French government did not have to make it for them. although ---
-----
He also ran afoul of President Nicolas Sarkozy of France. The government extended a lifeline of ?3 billion each to Peugeot and to its rival Renault, on Feb. 9. But Mr. Streiff said just two days later that he would cut 3,000 positions in France. He was also criticized by government officials for importing Peugeot cars made in the Czech Republic.
---------
Unka' George [George McDuffee]
------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
Roll around, roll away, mine is just a shit box with a collection of
30+yrs of crap. The Gerstner is in my garage at home with antique tools. Gil the HOLDZEM=A9=AE king - contrary to popular beliefPeople are coming up with more things it Holdz every day:
Ball point and felt pens, mechanical pencil, screwdriver with interchangable blades, two scales, inch and metric, carbide scraper with magnet on end, Glo-Burr, AAA flashlight with a usb key attached, comb, Palm PDA.
Wes
flashlight with
-scraper +scribe
ten set a stop on
he vise hex to
Ok you can't keep your caliper in your back pocket like me, so...... use a HOLDZEM=A9=AE!
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