In the News: Chrysler – Goodnight; GM – next?
After a lot of hard work, and long nights, it looks like Chrysler will be unable to avoid filing Chapter 11 bankruptcy. Evidently, some smaller creditors were not pleased with the anticipated settlement leaving no other option than bankruptcy reorganization. Then again, I don’t know how pleased I would be with $0.33 on the dollar for ever dollar of loan – but in this market, maybe that’s not so bad.
Apparently, the government is targeting a quick turnaround and back to business for the failing automaker, with a time frame from start to finish encompassing between 30 and 60 days – but hey, it’s the government, and I don’t think anyone will notice if it takes 150. But I digress. Upon emergence from bankruptcy proceedings Fiat will take a nice chunk of ownership for themselves, and Obama admirably believes that the new entity will be ready to operate smoothly, effectively, and more efficiently than ever before – here’s hoping.
Next on the chopping block is GM. With bondholders expecting 51% (or control) of the company, their counteroffer (from the offered 10%) is sure to make some waves and potentially harm the Union side of the equation (although quite beneficial to the tax payers as they would remain bondholders and, as such, be entitled to first dibs in the event of a liquidation). Presumably this structure, in the grand scheme of things will allow the government to be paid back and prevent GM from changing its name from General Motors to, the more appropriately titled Government Motors. Pull through GM, pull through…I’m rooting for you – but I don’t own any shares, nor a GM automobile, and I’m not planning to buy one, so I guess my support isn’t terribly helpful.
