Obama’s ‘Car Czar’ thugs knee-capped Chrysler into bankruptcy; Rattner deputy called Tom Lauria a “terrorist”
Posted by danishova on June 8, 2009
‘(Hat tip: El Rushbo)
"It’s over. The president doesn’t negotiate second rounds," Feldman said. "We’ve given and lent billions of dollars to your team, so your team could manage this properly. I’ve protected your management and board, and now you’re going to put me in a position to have to bend to a terrorist like Lauria. That’s BS."
By the evening of April 29, with their historic bankruptcy filing hours away, Chrysler Chairman Bob Nardelli and other company leaders were left with no doubt that Steven Rattner was calling the shots.
Chrysler executives still hoped to avoid bankruptcy. The UAW had ratified a second round of concessions that froze wages, cut retiree health care benefits and agreed not to strike the company for more than six years. All but a handful of lenders had signed off on the U.S. Treasury’s offer of $2 billion to write off $6.9 billion in Chrysler loans.
Reluctantly, however, the leaders were recognizing the harsh decision Rattner made weeks earlier: Chrysler was filing for Chapter 11, no matter what.
Rattner had met with Ron Kolka, Chrysler’s chief financial officer, and told him how it would go…
As details emerge in bankruptcy proceedings, it is clear Rattner has both the president’s absolute trust and a go-for-the-jugular instinct. He was not interested in a mundane, outpatient treatment for suffering Chrysler. The president wants major surgery on Detroit’s auto industry, and Rattner is running the operating room.
Gee, maybe this thug should be put in charge of our healthcare too. But I digress. More snippets:
Not since President Harry S. Truman seized the American steel industry in 1952 has America seen such a bold exercise of federal power over a vital organ of the U.S. economy.
More than 30 hours of testimony and dozens of e-mails in the court of U.S. Bankruptcy Judge Arthur Gonzalez lift the curtain on how forcefully President Barack Obama’s automotive task force pushed Chrysler LLC into bankruptcy and into the arms of Fiat SpA of Italy…
Chrysler executives preferred to keep Chrysler as a stand-alone enterprise — even after Rattner declared March 30 that their turnaround plan was not viable.
But their fate was not completely in their own hands, and Rattner & Co. was already committed to a deal with Fiat…
Despite the government’s commitment to Fiat, in the final days before the April bankruptcy filing, the Chrysler team resurrected the idea of a merger with GM that was initially proposed last fall.
Robert Manzo — a financial consultant whose Capstone Advisory Group will be paid $17 million when the Fiat sale closes — was the main supporter of resurrecting the GM deal. He pushed the idea in an April 14 e-mail to LaSorda.
"He even, in his documents, asked that we look at three specific platforms: the truck, the Jeep and the minivan," LaSorda said in court.
Questioned by Glenn Kurtz, representing three Indiana pension funds, about why he suggested that Nardelli and LaSorda revisit the GM option, Manzo said: "I do believe the valuations of an alliance with GM were higher than those of a deal with Fiat."
But Rattner and the Treasury team had already made clear on March 30 that the task force would put taxpayer money only into a partnership with Fiat.
What did this deal cost Fiat? Nothing!
Fiat, the task force’s chosen partner, brought no cash to the table. The Italian automaker wanted to offer only the underpinnings of future vehicles, engines and other technology that Fiat and Chrysler initially said was worth $8 billion to $10 billion. However, in bankruptcy court, Altavilla, who is chief executive of Fiat Powertrain Technologies, said Fiat’s contribution was worth considerably less: $3 billion.
Great deal, Barack!
Read the whole thing here.
1. Some history on the Fiat deal:
Even before starting discussions with Chrysler, Marchionne had laid the groundwork to move Fiat back across the Atlantic after a 25-year hiatus. Last summer he approached Volkswagen (VLKAY), BMW (BMWG), Nissan (NSANY), Ford (F), and others to find a partner willing to help Fiat build and sell its cars in the U.S.
So why Chrysler? For starters, it’s cheap. As in free. The proposed deal calls for Fiat to take a 20% stake in Chrysler in exchange for small-car technology. And if the two sides get a deal, the company will have $6 billion in federal money to spend on restructuring. Marchionne, meanwhile, could tap Chrysler’s dealer network to sell Fiats within a year or two. Chrysler "could be the least expensive way into the U.S. for Fiat," says former Chrysler President Thomas Stallkamp.
Yep, you don’t get much less expensive than “free” plus $6 billion of taxpayer dollars from Americans whose largesse will be rewarded by being pushed into small cars only a clown would love.
2. Just in – Supreme Court delaying Chrysler bankruptcy.
3. Supremes allow structured bankruptcy to go forward. The concept of ‘secured lenders’ and contract law is dead for now.
4. Ed Morrissey writes about Lauria the “terrorist” and provides video: