Chrysler: Held Hostage by Cerberus

By James Kwak

In this brief interval before the new housing plan is announced, I’ll try to sneak in a comment on the auto bailout, and the plans submitted by GM (GM) and Chrysler yesterday. This may be an obvious question that many people have thought about, and it got some discussion in December, but: Why does Cerberus (the private equity firm that owns Chrysler) need money from the government?

Let’s take this step by step. Assume GM has a viable restructing plan, but it needs $30 billion to execute the plan, after which it will be a viable standalone business. Even on that assumption, given market conditions, they would be unlikely to be able to sell $30 billion in newly-issued stock or raise $30 billion through bonds or loans, because of information asymmetry: put simply, no one would believe them. Therefore, they can only get the money from the government, because the government is the one institution that will provide a below-market loan because of the public interest (saving the auto industry and either hundreds of thousands or millions of jobs, depending on whom you believe).

Now, with Chrysler, which is asking for $5.3 billion in new loans (on top of the $4.3 billion already committed, and in addition to another $6.0 billion from the Department of Energy’s alternative energy funding program - see page 16), there is a difference: The people writing the plan and the people who could provide the money are the same people, since Chrysler is majority-owned by Cerberus, so there is no information asymmetry. Let’s provide a comparison. If Chrysler were a Silicon Valley, venture capital-funded startup that needed cash, and had a viable plan, the VCs would simply invest more money, effectively diluting themselves (and the founders). If the Cerberus overlords really believe the plan that their underlings mailed in yesterday, why not put in the money themselves? And even if they don’t want to put in additional equity like a VC would, why not loan the money to Chrysler and keep the interest payments themselves instead of sending them to Washington - and avoid the oversight that comes with government money? (In the proposal, Cerberus does offer to exchange their $2 billion loan to Chrysler for equity; but this just shows that they don’t expect to get the full $2 billion back. More tellingly, they are not offering to send good money after bad; they are not even offering to contribute some new cash, leveraged with a loan, which is the classical private equity model.)

Cerberus’s stated reason in December for not putting in more money was that this would violate their fiduciary duty to their limited partners. This looks to me like an admission that putting more money into Chrysler is a bad investment, but if someone knows more about this argument, let me know.

There are two other plausible reasons why Cerberus would prefer to go to the government. The first is if they can get cheaper capital (a lower-interest loan) from the government than from their limited partners or from the capital markets. But then the question becomes why the government should be in the business of giving cheap capital to a private equity firm that has other sources of capital.

The other possibility is that Cerberus/Chrysler doesn’t actually believe the plan, and that’s why Cerberus doesn’t want to put in the money. The plan is a Hail Mary strategy that might work, but the chances of it working aren’t good enough to put in their own money; but if they can get free money from the government (free in the sense that if Chrysler collapses, Cerberus won’t have to repay the government), they might as well give it a shot. This is the implication of page 13 of the Chrysler proposal:

If Chrysler is unable to restructure its liabilities and if further government funding is not forthcoming, the “Orderly Wind Down” alternative would be pursued, however it may have severe social and economic consequences for both Chrysler and the broader U.S. economy

This sounds like an admission that they are willing to attempt the plan with government money, but not their own money.

However, we can’t reliably infer what Cerberus really believes from their behavior, because even if they were willing to put in their own money, they wouldn’t say so until after the government turned them down. You’ve probably heard this bank bailout analogy: The banker walks into the Oval Office, puts a gun to his head, and threatens to blow his brains out unless he gets a bailout; the government bails him out because they don’t want to have to clean the carpet. The difference here is that no one cares about Cerberus (the three-headed dog that guards the entrance to the underworld), so instead he dragged a hostage named Chrysler into the Oval Office and put the gun to her head. In the end, this feels like a kidnapping, where Cerberus is betting that the Obama Administration won’t be willing to take any risks with the hostage’s life.

(Of course, American oligarchs don’t use guns; they use lobbying. Which is why John Snow is still chairman of Cerberus despite overseeing this catastrophic bet on the auto industry.)

Comments

[babyray:]

Nobody seems to be trying to fix the real problems. How can any American manufacturing company compete with these unfair trade agreements, competition that has most of their operations in countries that provide health care and government imposed EPA and cafe standards.We need to build back our manufacturing sector. It is the backbone of every economy in the world. I am sick of buying american flags made in China. Be American!! Buy American!!!

Feb 18 01:43 PM

[Duude:]

"If the Cerberus overlords really believe the plan that their underlings mailed in yesterday, why not put in the money themselves?"

While Chrysler is privately owned by Cereberus, it itsn't their only investment. They are correct in stating that they have a fiduciary responsibility to their partners. Its called allocating your investment dollars so as to spread risk.
What about GM? Shouldn't we be asking if all management have allocated all of their savings into GM? What about the UAW? Shouldn't we be asking why all of their pensions aren't invested with GM? What about the politicians that will surely give GM as much as they need? Shouldn't we be asking those politicians why they don't put their own personal money with GM before spending other people's money?

Feb 18 01:50 PM

[Auto Guy:]

What is the difference if it is public or private? The real situation is that they are both public companies. GM has shares on the stock exchange mainly from large "institutional investors", ie Pension Funds, bank funds, etc. Chrysler has money from pension funds, other retirement funds and bank funds that have been funneled through Cerberus. These are all forms of "public" financing, just the governance is different and that sharehold structure is different. It is both mainly ordinary investor, pensions of 401Ks, that are at risk.

We need to make sure that there the US government has first positon on any positive cash flow coming in the next several years, then proceed into a restructuring.that maintains what we can of the industry. In any case at this point we are going to have some very scary times for many states with likely defaults on public debt and possible bankruptcies for some cities and states because of lost tax revenue from the closed plants and unemployed workers.

I hope the rest of the US and world is prepared for the eventual fallout from what we are seeing happening. The people in service industries are going to see their jobs disappear as well going forward. This is a real mess and is getting worse. We are entering into our "lost decade" similar to Japan in the 1990s.

The best thing we can do is take our medicine, pick ourselves up and move forward. We will come back from this, but the longer the governement meddles in it the longer the recovery will take....just like Japan.

Feb 18 01:51 PM

[Crasyeddie:]

This whole thing is ridiculous - why does Cerberus even have a say anymore in what happens to Chrysler - they should have been diluted down to nothing when the first tranche of government money came in. Your telling me if they were the funder in a distressed deal of this magnitude they would let the existing equity holders retain a significant % of the equity and control over the entity? No f***ing way would they. Whether or not Chrysler needs to be saved is open for debate - but can't see how anyone (other then Cerberus) can argue that the private investors should not be totally wiped out and told to go take a hike. They are big boys they made a horrendous bet - right it off - and move on to your other bad bets and go back to getting rich off your management fees. Cereberus should have ZERO to do with what happens to Chrysler going forward.

PS for the guy that claims b/c Cerberus managaes pension money they need to be saved - that is fine - if they promise to give back all the fees they have taken on that pension money then we can talk about saving what is left.

Feb 18 02:23 PM

[User 283977:]

One difference between a public and a private company is that with a public company you have audited, public financial information available. You don't have that with a private company.

A second difference concerns the nature of Cerberus ownership. It's owned by a relatively few rich individuals. The obvious question that will be asked is "Should the Government bail out a few super rich individuals with public money"?

This is a public relations issue that is likely to come back and haunt politicians that approve funds for a Chrysler bailout. Here is one possible scenario that could be put forth. Did the fact that Cerberus is run by President Bush's former Treasury Secretary Jack Snow have ANY bearing on how Chrysler got included in the first bailout that Congress did not approve, but that was finally authorized by President Bush?

I don't know if it had any bearing, and frankly, anyone that does know is not going to be telling. But there is no denying that there is a likely PR problem associated with bailing out a company who's CEO is a former political insider, and who's owners consist of a relatively few super rich individuals. The case that it does not matter would need to be made to the American Public.

If I was a member of Congress, I would want that potential land-mind disarmed before I would consider voting for any Chrysler bailout. So yes, there are differences between bailing out a public versus a private company.

Feb 18 03:02 PM

[wobatus:]

But I thought cerberus has said it doesn't care if its equity gets wiped out. The bailout is for the bondholders, not equity.

Feb 18 04:21 PM

[thku4grace:]

On Feb 18 01:05 PM Bob Lunn wrote:

> Cerberus is playing poker using Chrysler jobs as the stakes. I don't
> think Chrysler should have received access to public funding in the
> first place given that it’s a private company. I also don't think
> providing no risk, low interest loans to Chrysler is going to save
> that many jobs because I suspect the market for Chrysler products
> in 2009 is going to be so low that Chrysler is going to have to lay
> off major numbers of workers anyway.

I agree that Chrysler shouldn't have received access to public funding, but then I don't believe either should Ford or GM for the simple fact that these companies have been poorly managed for a long time and the current financial crisis was all that was needed to shake up the subpar performers from the market. Free capitalism is the best avenue.

> If Cerberus wants to save their investment, let them kick in the
> necessary funds and take the risk. If not, let Chrysler go bankrupt.
> If the Government still wants to try to save jobs, let the Government
> buy the assets for next to nothing, and provide the necessary funding
> to take them out of bankruptcy. This effectively nationalizes Chrysler.
> If it does become economically feasible, at some point in the future,
> sell shares and make the company public again. Using the Poker metaphor…
> CALL… show me what you got.

What I disagree with is that there should be special significance given to publicly traded firms over privately held firms. If you ask Congress they will tell you that for both companies its about jobs for the working class. I don't doubt Chrysler will likely need to lay off many workers...but so will GM and Ford. Car sales figures make it quite clear for all.
The problem I have with your post is you have colored Cerberus as a fat cat company looking for welfare from the government and thus are undeserving. That may be true but what about GM and Ford? Don't institutions and rich people own these companies too? Kirk Kerkorian had a large ownership position before he gave up and sold out. Was he the only one? I think not.
What about asking GM management to put more of their personal assets into GM? Don't they believe in their own company? Or do they only believe in it as far as government money will take them?
I mean who needs diversification? What about the UAW pension making a big investment? They have a lot to lose and yet not only will they not invest, they are even unwilling to offer much of any concessions. Why is it somehow different? Using a poker metaphor, perhaps we ought not deal off the bottom of the deck to some firms that we attach some misguided working class company mentality and deal fairly. Frankly, I would rather the Congress took the deck and went home for all 3 firms. No loans till after renegotiation through Chapter 11. But enough of the class warfare crapola.

Feb 18 04:38 PM

[Leftfield:]

These problems are just beginning. Once the bankers were handed trillions, it became hard to turn down Detroit for a mere $30 billion. All of which are only down payments anyway. Good money after bad.

It will be hard not to point to proliferating examples to spread this foolishness ever farther and wider. Why isn't the UAW a prime investor in its supposed future? (By the way, Cerberus is 80% ownership, Mercedes is 20%, of Chrysler). And, local and state governments everywhere are about to have hands out to prop up their above-market pay and lush benefits.

Keeping these above-market players intact is a great source of kickbacks, no doubt. And prevents real reform. Like, rules, taxes, regulations, the plague of lawyers, the mess that is health care that cripple our economy.

The pretense is to continue until that becomes impossible. Which it has to barring a recovery. With this unfocused, beheaded chicken collection of government actions which are larded with pork, I think we will run out of options sooner than a recovery will appear.

Feb 18 07:12 PM

[User 283977:]

My comment with respect to the advisable of providing Government money to bail out private companies stands. My primary reason concerns transparency of what they are doing with the Governments money. You know a lot more about what is going on with a public companies financial situation then with a private company.

To me, asking for public money when you have a lot of money is beyond greedy, its pure avarice and should not be condoned under any circumstance. That's not an expression of "class warfare" it’s a matter of honour / style.

Cerberus does have the financial assets necessary to keep Chrysler in business. However, instead of providing Chrysler with the needed funding, they are asking the Government for the money. The whole point of James's article is that Cerberus is holding Chrysler hostage with the threat that if the Government does not provide the money, they will declare bankruptcy and lots of jobs will be lost. I believe my Poker metaphor fits the situation well. I suggest that if Cerberus declines to fund at least half of the needed funds, let Chrysler go bankrupt and then have the Government purchase the assets at fire sale prices.

I did not mention GM because the article is about Chrysler, NOT GM. With respect to GM, on the plus side, GM is a public company so its finances are a matter of public record. GM's management do not own GM. It’s a public company. However, executive management is well compensated with stock, so GM's management does have quite a bit of their own valuation at risk. GMs shareholders have already been mostly wiped out. The real power with respect to ownership of GM resides with its bond/ debt holders. The primary holders of that debt are very large institutions, and they very likely could come up with the capital if they wanted to. However, they also don't want to assume the risk.

I think the same Poker strategy should be applied to GM as well. If GMs debt holders don't come up with at least half of the needed capital, let GM go bankrupt. Alternatively, make GMs debt holders exchange at least half of their holdings for GM equity. Again, if they refuse, let GM go bankrupt. Now the debt holders loose a major portion of their investments, all contracts are broken and the Government picks up the assets at fire sale prices. If the companies can emerge from bankruptcy, sell the companies back into the private domain when possible.

As you can see, my view is quite similar to your view with the exception that any interpretation of "class warfare" is a figment of imagination.

Feb 18 07:25 PM

[Auto Guy:]

I didn't say that Cerberus should be left with anything in the end. They should not, as a common equity holder, they should be diluted out or put in a position that they only benefit after the government gets its money back plus a return.

I stand by my comments on private vs. public. Most of the money in Cerberus and other private equity is actually public money from pension funds, etc. It didn't use to be that way, but they saw the PE firms making a killing in the 1990s and early 2000s and wanted in. Now we have a mix of rich folks money and pension funds, etc. in these funds.

Also, just because a company is public doesn't mean that the public has access to correct financials. Don't you remeber Enron or Worldcom?

Ultimately it is going to be the country that is hurt by the disappearance of manufacturing in the United States. The service economy and trading money around doesn't keep the USA a first rate country. It takes making and selling things to do that and the main avenues for that are manufacturing and agriculture. We are a great country because we have had industries that produced hard goods. We have abandoned that in the past 20 years and decided that we can continue to be great as a service economy sending all our money overseas. We will see how that turns out, but I think the result is going to be ugly.


On Feb 18 07:25 PM Bob Lunn wrote:

> My comment with respect to the advisable of providing Government
> money to bail out private companies stands. My primary reason concerns
> transparency of what they are doing with the Governments money. You
> know a lot more about what is going on with a public companies financial
> situation then with a private company.
>
> To me, asking for public money when you have a lot of money is beyond
> greedy, its pure avarice and should not be condoned under any circumstance.
> That's not an expression of "class warfare" it’s a matter of honour
> / style.
>
> Cerberus does have the financial assets necessary to keep Chrysler
> in business. However, instead of providing Chrysler with the needed
> funding, they are asking the Government for the money. The whole
> point of James's article is that Cerberus is holding Chrysler hostage
> with the threat that if the Government does not provide the money,
> they will declare bankruptcy and lots of jobs will be lost. I believe
> my Poker metaphor fits the situation well. I suggest that if Cerberus
> declines to fund at least half of the needed funds, let Chrysler
> go bankrupt and then have the Government purchase the assets at fire
> sale prices.
>
> I did not mention GM because the article is about Chrysler, NOT GM.
> With respect to GM, on the plus side, GM is a public company so its
> finances are a matter of public record. GM's management do not own
> GM. It’s a public company. However, executive management is well
> compensated with stock, so GM's management does have quite a bit
> of their own valuation at risk. GMs shareholders have already been
> mostly wiped out. The real power with respect to ownership of GM
> resides with its bond/ debt holders. The primary holders of that
> debt are very large institutions, and they very likely could come
> up with the capital if they wanted to. However, they also don't want
> to assume the risk.
>
> I think the same Poker strategy should be applied to GM as well.
> If GMs debt holders don't come up with at least half of the needed
> capital, let GM go bankrupt. Alternatively, make GMs debt holders
> exchange at least half of their holdings for GM equity. Again, if
> they refuse, let GM go bankrupt. Now the debt holders loose a major
> portion of their investments, all contracts are broken and the Government
> picks up the assets at fire sale prices. If the companies can emerge
> from bankruptcy, sell the companies back into the private domain
> when possible.
>
> As you can see, my view is quite similar to your view with the exception
> that any interpretation of "class warfare" is a figment of imagination.
>

Feb 18 09:46 PM

[Auto Guy:]

I do not diagree with your point. My point was that for the government to exclude Chrysler because they are owned by Cerberus is not the reight way to frame the question. The right way is for Cerberus to get be diluted out or for the government to take a positon that is superior to any current equity, bond or debt holder.

The interesting point about the whole Cerberus deal is that Chrysler "paid" $7.4 billion for Chrysler in May 2007. I put that in quotes because the majority of this was supposedly capital paid in to Chrysler unpon the transaction with Daimler. Daimler actually paid Cerberus $678 million to take Chrysler's obligations on, including pensions and healthcare obligations estimated at the time to be $18 billion, in the final analysis of the deal. So it is hard to tell how much money Cerberus actually has in the deal.

Any way you cut it this is going to be painful, just like many other parts of the economy are right now. My point was that the government involvement is only going to prolong any serious recovery, but without it we have to be prepared for a seriously deep recession that is probably prolonged. However, we all know that with deep prolonged recessions, we usually get a good growth economy that follows.

My concern is that with all the government stimulus, that we will not see the end of the recovery anytime soon because it will be muted by government spending which will lead to higher tax rates and inflation. That is exactly how the Japanese entered their "lost decade", which actually is still going on two decades later. Government intervention = Zombie banks & zombie companies = no recovery.

I hope that I am wrong.


On Feb 18 02:23 PM Crasyeddie wrote:

> This whole thing is ridiculous - why does Cerberus even have a say
> anymore in what happens to Chrysler - they should have been diluted
> down to nothing when the first tranche of government money came in.
> Your telling me if they were the funder in a distressed deal of this
> magnitude they would let the existing equity holders retain a significant
> % of the equity and control over the entity? No f***ing way would
> they. Whether or not Chrysler needs to be saved is open for debate
> - but can't see how anyone (other then Cerberus) can argue that the
> private investors should not be totally wiped out and told to go
> take a hike. They are big boys they made a horrendous bet - right
> it off - and move on to your other bad bets and go back to getting
> rich off your management fees. Cereberus should have ZERO to do with
> what happens to Chrysler going forward.
>
> PS for the guy that claims b/c Cerberus managaes pension money they
> need to be saved - that is fine - if they promise to give back all
> the fees they have taken on that pension money then we can talk about
> saving what is left.

Feb 18 10:16 PM

[Auto Guy:]

I do not diagree with your point. My point was that for the government to exclude Chrysler because they are owned by Cerberus is not the reight way to frame the question. The right way is for Cerberus to get be diluted out or for the government to take a positon that is superior to any current equity, bond or debt holder.

The interesting point about the whole Cerberus deal is that Chrysler "paid" $7.4 billion for Chrysler in May 2007. I put that in quotes because the majority of this was supposedly capital paid in to Chrysler unpon the transaction with Daimler. Daimler actually paid Cerberus $678 million to take Chrysler's obligations on, including pensions and healthcare obligations estimated at the time to be $18 billion, in the final analysis of the deal. So it is hard to tell how much money Cerberus actually has in the deal.

Any way you cut it this is going to be painful, just like many other parts of the economy are right now. My point was that the government involvement is only going to prolong any serious recovery, but without it we have to be prepared for a seriously deep recession that is probably prolonged. However, we all know that with deep prolonged recessions, we usually get a good growth economy that follows.

My concern is that with all the government stimulus, that we will not see the end of the recovery anytime soon because it will be muted by government spending which will lead to higher tax rates and inflation. That is exactly how the Japanese entered their "lost decade", which actually is still going on two decades later. Government intervention = Zombie banks & zombie companies = no recovery.

I hope that I am wrong.


On Feb 18 02:23 PM Crasyeddie wrote:

> This whole thing is ridiculous - why does Cerberus even have a say
> anymore in what happens to Chrysler - they should have been diluted
> down to nothing when the first tranche of government money came in.
> Your telling me if they were the funder in a distressed deal of this
> magnitude they would let the existing equity holders retain a significant
> % of the equity and control over the entity? No f***ing way would
> they. Whether or not Chrysler needs to be saved is open for debate
> - but can't see how anyone (other then Cerberus) can argue that the
> private investors should not be totally wiped out and told to go
> take a hike. They are big boys they made a horrendous bet - right
> it off - and move on to your other bad bets and go back to getting
> rich off your management fees. Cereberus should have ZERO to do with
> what happens to Chrysler going forward.
>
> PS for the guy that claims b/c Cerberus managaes pension money they
> need to be saved - that is fine - if they promise to give back all
> the fees they have taken on that pension money then we can talk about
> saving what is left.

Feb 18 10:16 PM

[a believer:]

I'm not a gold bug, but...

every article about the government spending trillions it does not currently have to bail out the insovent banks, homeowners, and automakers makes me want to get rid of the paper money and buy gold and silver.

It looks like alot of others feel the same way...

Feb 18 10:30 PM

[Larrysyr:]

It looks like the government assistance to GM and Chrysler will not prevent them from drastically restructuring or going out of business. What it has accomplished is postponing that step long enough so that those companies did not go down simultaneously with the big banks. I think this will end up being a wise use of public resources.

GM has given their plan, which is to shrink and to renegotiate their liabilities (Chapter 11 in disguise). Chrysler may have a plan, but other than Jeep, dead still equals dead (Chapter 7 in disguise?).

We could have let this happen in November, and many people advocated simply cutting these companies loose at that time. But if you remember how chaotic October and November were, there is no way the bankruptcies could have been accomplished at that time without creating turbo-chaos.

Nobody can predict the final outcome, but it looks like cooler heads will have a chance to chop these companies into smaller, healthier enterprises, and amputate the truly dead parts.

Maybe this could have been done in November, but I think the outcome then would likely have been much worse.

Feb 19 10:14 AM

[NITRAM:]

Your are an idiot. Cerberus is a private company using taxpayer money for their benefit. We should not be helping them in any way. Let Chrysler go bankrupt. Then see what Cerberus does to protect their investment.


On Feb 18 12:46 PM Aristophanes wrote:

> Or is Cerberus being held hostage by Chrysler?

Feb 19 03:34 PM

[NITRAM:]

Dont say Chrysler. Its Cerberus. A privately owned company. Why are we using taxpayer money to help a private investment firm. As usual a private company is smarter than the ass holes in washington. Deny any monies to Cerberus. Let the private investment company find their own money, NOT taxpayer money. Cerberus will find a way to save their investment or loose it. Remember, even a great company like Dailmer could not sell Chrysler products.


On Feb 18 04:38 PM thku4grace wrote:

>
> On Feb 18 01:05 PM Bob Lunn wrote:

Feb 19 03:53 PM

[NITRAM:]

Wake up.


On Feb 18 04:21 PM wobatus wrote:

> But I thought cerberus has said it doesn't care if its equity gets
> wiped out. The bailout is for the bondholders, not equity.

Feb 19 03:53 PM

[NITRAM:]

You sound like the jerks in washington. Cerberus IS NOT a public company. They bought it from Dailmer. Those companies that put money into the purchase can not be bailed out with taxpayer money. If we deny Chrysler any monies, as we should, what do you think those investors will do? Walk away, or help their investment.


On Feb 18 01:51 PM Auto Guy wrote:

> What is the difference if it is public or private? The real situation
> is that they are both public companies. GM has shares on the stock
> exchange mainly from large "institutional investors", ie Pension
> Funds, bank funds, etc. Chrysler has money from pension funds, other
> retirement funds and bank funds that have been funneled through Cerberus.
> These are all forms of "public" financing, just the governance is
> different and that sharehold structure is different. It is both mainly
> ordinary investor, pensions of 401Ks, that are at risk.
>
> We need to make sure that there the US government has first positon
> on any positive cash flow coming in the next several years, then
> proceed into a restructuring.that maintains what we can of the industry.
> In any case at this point we are going to have some very scary times
> for many states with likely defaults on public debt and possible
> bankruptcies for some cities and states because of lost tax revenue
> from the closed plants and unemployed workers.
>
> I hope the rest of the US and world is prepared for the eventual
> fallout from what we are seeing happening. The people in service
> industries are going to see their jobs disappear as well going forward.
> This is a real mess and is getting worse. We are entering into our
> "lost decade" similar to Japan in the 1990s.
>
> The best thing we can do is take our medicine, pick ourselves up
> and move forward. We will come back from this, but the longer the
> governement meddles in it the longer the recovery will take....just
> like Japan.

Feb 19 03:57 PM

[NITRAM:]

Since when does the new Socialistic administration care what we think?


On Feb 18 01:33 PM elcopone wrote:

> Nice article. Right on the money. Congress are a bunch of corrupt
> fools for ever giving them a penny. Consumers and taxpayers vote
> with their wallets and they have clearly voted for Chrysler to fail.
>

Feb 19 04:00 PM

[NITRAM:]

Let them go down. We will survive


On Feb 18 12:11 PM morph366 wrote:

> You quote from Chrysler's proposal as follows
>
> If Chrysler is unable to restructure its liabilities and if further
> government funding is not forthcoming, the “Orderly Wind Down” alternative
> would be pursued, however it may have severe social and economic
> consequences for both Chrysler and the broader U.S. economy
>
> From my perspective that sounds like quite a simple threat - no more
> government money and they will let the ship will go down with "severe"
> consequences to the broader US economy.

Feb 19 04:01 PM