Thursday

Obama becomes a conservative; well almost.


Chrysler files for bankruptcy protection
Obama says automaker will ‘thrive’ in partnership with Italy's Fiat

Well that got my attention quick, fast and in a hurry. It always happens when I hear something familiar, that sense of déjà vu. No, not déjà vu more like a resounding “I told you so”.
The article from MSNBC (my favorite “left leaning” well spring of inspiration) went on to say:

DETROIT - Chrysler LLC filed for bankruptcy protection Thursday and will form an alliance with the Italian carmaker Fiat Group SpA in an effort to revive the nation's ailing third-largest automaker.

The Obama administration said it had long hoped to stave off bankruptcy for the nation's third largest automaker, but it became clear that a holdout group of creditors wouldn't budge on proposals to reduce Chrysler's $6.9 billion in secured debt. Clearing those debts was a needed step for Chrysler to restructure by a government-imposed Thursday deadline.

Oh, I get it; the damn capitalists are to blame again (feigned surprise). I can’t help but think this is going to be a recurring nightmare for the next four years but I digress. Now back to the article:

"No one should be confused about what a bankruptcy process means," President Barack Obama said in a midday announcement. "This is not a sign of weakness but rather one more step on a clearly chartered path to Chrysler's revival."

That’s kind of funny, at least considering that a few months back we were told by the same misadministration that bankruptcy would cause a loss of consumer confidence in the car companies and therefore their impending demise. This was the crux of the argument used to waste billions in tax payer dollars to bail out these companies.

Now, all of the sudden, bankruptcy returns as a viable option? I am reminded of one of my favorite cartoons, “Timon and Pumbaa”. There is a memorable exchange between Timon and Pumbaa that goes something like this:

Timon: Let's see, there's gotta be some way of getting out there.

Pumbaa: Why don't you use a small open vessel that moves across bodies of water my means of oars, sails or engine?
Timon: Why mess with all that when I can use a *boat* instead?

It seems that Obama has now grasped the concept; where was he when conservatives were railing against auto maker bailouts and endorsing the very concept he seems to have recently discovered?

Chrysler filed for Chapter 11 bankruptcy protection in New York on Thursday with the hopes of emerging in as little as 60 days under the new partnership with Fiat. The government, which has already poured $4 billion in loans into Chrysler, would provide up to $8 billion more to carry the company through bankruptcy, said senior administration officials speaking on condition of anonymity. The government will also help appoint a new board of directors.

The deals give Chrysler "a new lease on life," Obama said.

Unlike the billions of tax payer dollars that were recklessly dumped into a failing industry. I’m all about trying to save auto makers, they are an integral part of our nation’s recovery, but commons sense has to play a key role in that. Bankruptcy should have been a starting point and not a last resort.

"This is not a sign of weakness," he said. "I have every confidence that Chrysler will emerge from this process stronger and more competitive."

Where have I heard that before? Oh, right before they were given our money. It seems to ring a little hollow given the results we have achieved thus far.

Under bankruptcy, Chrysler would still sell cars and the government would back its auto warranties. But Chrysler said Thursday that it will idle its plants during the legal proceedings. The company's chief executive, Robert Nardelli, said he will leave when the bankruptcy is complete.

In other words we managed to slightly postpone the inevitable at great expense.

When that occurs, the Auburn Hills, Mich.-based automaker would end up owned by the United Auto Workers union, the U.S. government and Fiat. The Canadian and Ontario governments, which are also contributing financing, would have small stakes.


But Fiat, which the Obama administration hopes can jump start Chrysler with its fuel-efficient and lower-emission technology, could end up the majority stakeholder. Fiat would initially get 20 percent, a share that could rise to 35 percent if certain benchmarks are met. Fiat said Thursday it could get an additional 16 percent by 2016 if Chrysler's U.S. government loans are fully repaid.


I guess the US taxpayer is somewhere at the bottom of this list of encumbrances. To quote another cartoon movie “There’s whale poop and then there’s you (read you as US taxpayers)”. – “Shark Tales”

To prove that he hadn’t completely flipped and become a card carrying conservative Obama felt it necessary to impugn the creditors who found the deal unfair. Castigating them for actually wanting to keep more than 20 or thirty cents on the dollar (damn evil capitalists). I'll bet the UAW got a better deal than that.

The article stated that:

Along with the Fiat deal, the UAW ratified a cost-cutting pact Wednesday night.
Treasury reached a deal earlier this week with four banks that hold the majority of Chrysler's debt in return for $2 billion in cash.

But the administration said about 40 hedge funds that hold roughly 30 percent of that debt also needed to sign on for the deal to go through. Those creditors said the proposal was unfair and they were holding out for a better deal.

Of course our anti-capitalist leader had an appropriate response….wait for it…

"I don't stand with them," Obama said.

He shoots he scores! We I guess it was a minor victory for conservatives who seem more than a little prophetic now. I wonder how much tax payer money will flow into the abyss that is GM before Timon, I mean, Obama has another epiphany.

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