So we should definitely let Chrysler and all it's employee go down the drain? Forget all the idiots that bought any car under the Chrysler name too. I'm with you guys.
I think I read this as sarcasm, but I can't be sure. If it wasn't meant sarcastically, then I apologize and you can ignore the rest of this post.
No offense intended, but your statement is a complete non sequitur. It emphasizes my point that one of the problems here is that people don't understand the issues that are in play. They have been mislead about them, so they can't fairly judge what actually happened.
The decisions here don't have anything to do with whether or not Chrysler 'goes down the drain'. That isn't going to happen, and wasn't going to happen either way - it wasn't one of the possibilities that was seriously on the table in the end. Furthermore, what the 'hold-out' debt-holders did in refusing this offer wasn't going to force that to happen - it didn't really even need to force bankruptcy. (*)
We are talking about whether we treat all of the debt-holders (including the senior, secured debt-holders and the UAW) fairly, or whether we totally screw some of them so that we can treat others much, much better. Either way, Chrysler could continue to operate. In fact, either way, Chrysler could have stayed out of bankruptcy. (Bankruptcy doesn't mean that Chrysler 'goes down the drain'.) Regardless of whether or not the senior, secured debt-holders were willing to accept this deal, the Administration could have kept Chrysler out of bankruptcy, had it wanted to.
The issue here is that the only thing the Administration seemed to be concerned with, was being able to give the UAW and Fiat sweetheart of deals, at the expense of other people, who under the law should have faired better than those two entities. Again, the decision here wasn't between bankruptcy or no bankruptcy. It was between treating all parties fairly under the law, or subverting the law so that we could screw some groups in order to treat the other ones especially well. The decision about bankruptcy was a wholly separate issue, and the Administration could have decided that issue either way, regardless. A failure to realize that, is a failure to understand the actual mechanics of the process and what went on. The assertion that the 'hold-out' debt-holders forced Chrysler into bankruptcy is absolutely absurd.
They are going into bankruptcy because the Administration refused to ask the UAW to take what it deserved from the situation, under the law, instead of letting it take much, much more than it deserved. Under the law, the senior, secured debt-holders are entitled to what they are owed before the junior and non-secured debt-holders (e.g. the UAW). If there is not enough cash to pay them, and we don't want to liquidate Chrysler's physical assets to pay them (that would kind of be like Chrysler 'going down the drain'), then they should get an appropriate amount of equity in the new Chrysler - before the UAW does. No one suggested that the UAW should get screwed, just that the deal should be somewhat fair (or at least not laughably unfair). I'm sure it could have been fair enough to get the 'hold-outs' to agree, and still let the UAW get the better end of the deal - just not quite as good a deal as they are getting now. Those 'hold-outs' were obviously willing to negotiate in good faith, and accept less than they deserved - so long as it was reasonable.
So, Chrysler could be 'saved' - as it will be now - but it could be done fairly, and in accordance with long standing bankruptcy principles. Instead, the Administration wants to ignore those principles and do the unfair thing - so that the UAW and Fiat can own the company. Either way, the company could still exist and operate - the only questions would be who owns it and how much do they own. So, again, your statement has nothing to do with the situation as it stands now.
Please don't take what I am saying the wrong way - I am only trying to make the reality of the situation a little clearer. The problem is that a lot of people think they understand it, because they heard a snippet or two on the news or heard some of the spin, but they really don't. I don't care what people think about the propriety of the situation, I would just like them to understand it somewhat before they form a strong opinion.
* By the way, I do think Chrysler should 'go down the drain', for the good of the entire American auto industry, and for the good of auto workers as a whole, in the long term. As it looks now, it will just serve as a platform to allow foreign competition an easy opportunity to compete with the domestic manufacturers in the very portions of the market that they need to gain market share in. However, whether or not Chrysler should go away is a separate discussion from the one that is currently being had with regard to Chrysler.
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