Chrysler files for bankruptcy, Will close 8 plants; 3 in Detroit area
|Chrysler LLC plans to close eight U.S. factories employing about 6,500 workers, including three in the Detroit area, by December 2010 under its bankruptcy plan filed today.|
Combined with the 3,400 jobs at Chrysler Financial which will also close under the plan, the company's bankruptcy could directly lead to nearly 10,000 job cuts, not including dealers which are expected to be shed as well.
In a filing by a Chrysler financial advisor, the company said the plants -- including Sterling Heights Assembly, Detroit Axle and Conner Ave. Assembly -- and assorted machinery valued at $2.3 billion will be sold to pay part of its unsecured debts.
The other plants on the list for closure that are still operating include St. Louis North, Kenosha Engine in Wisconsin and Twinsburg Stamping in Ohio. The list also includes two idled factories; Newark, Del., and St. Louis South.
The plants still in use would be leased back to the new Chrysler until they are shuttered. Detroit Axle and Sterling Heights would remain open until December 2010, while Twinsburg would close in March 2010, followed by St. Louis North in September and Kenosha Engine in October of 2010.
The Obama administration had said today that the bankruptcy plan would not lead to significant job losses at Chrysler. A source familiar with the plans said the plant closings and job cuts had been part of Chrysler's Feb. 17 viability plan submitted to the government. That plan had said Chrysler would cut 3,000 jobs and reduce factory capacity by 100,000 vehicles, but didn't detail where those cuts would be made.
Obama mad about the holdouts that told the Treasury to go screw after trying to lowball them on a deal. Far as I am concerned these holdouts are awesome for slapping down a crap deal. Obama wanted to screw these non tarp funded groups while handing over a car company to the UAW who is just as culpable as anyone else in causing this bankruptcy.
|At the same time, in an echo of the tensions that have run high between Washington and Wall Street, the president and his aides blamed the filing squarely on about 20 smaller investment firms and hedge funds. This group voted against the government's last offer to eliminate $6.9 billion in debt owed them.|
They "decided to hold out for the prospect of an unjustified, taxpayer-funded bailout," Mr. Obama charged. Rep. John Dingell, a Michigan Democrat, called the holdouts "rogue hedge funds" and "vultures" and said in a statement that they "will now be dealt with accordingly in court."
The smaller lenders and funds pose some threat to the process of restructuring Chrysler, said attorneys and bankers involved in the matter. They'll likely argue in court the U.S. is overriding contract law, bankruptcy law and constitutional protections against the seizure of private property.
The group, calling itself the "non-TARP lenders," a reference to the Troubled Asset Relief Program that's aided banks, said in a statement that it has "a fiduciary responsibility to all those teachers, pensioners, retirees and others who have entrusted their money to us." The most compliant of Chrysler's big creditors -- among them J.P. Morgan Chase & Co and Citigroup Inc. -- have received hundreds of billions of dollars in TARP aid.
UAW now owns Chrysler(and GM to be later) after Obama used taxpayer money to give it to them.
|Flanked by his automobile task force of cabinet secretaries and business advisers in the White House’s grand entranceway, Mr. Obama announced a plan that would allow the United Automobile Workers, through their retirement plan, to take control of Chrysler, with Fiat and the United States as junior partners. The government would lend about $8 billion more to the company, on top of the $4 billion it had already provided.|
How many billions were wasted just so Obama could in the end handover the company to the UAW?
NYTIMES with a FAQ.
Tom Walsh of the Freep points out the obvious intrusion of Obama into private business.
|And despite his platitudes to the contrary, Obama fully intends to have a voice in (a) running these companies, and (b) telling them what kind of products to build.|
Many Americans are horrified by one or more of these presidential intrusions into the realm of free markets and private enterprise, although neither the markets nor companies have ever truly been free of federal influence.
But we are where are.
GM and Chrysler are stuck in the position of any supplicant who appeals to the lender of last resort for survival. They must do whatever the lender wants.
In the ongoing drama over Detroit’s future, the holdout hedge funds who refused to be strong-armed by Obama’s task force into eating big losses on their Chrysler debt may have done the president a huge favor.
Obama blamed “a small group of speculators” for forcing the Chrysler rescue into bankruptcy court, knowing full well that 99% of the public regards such speculators as sleazeballs.
Ding. Score one for the prez.
If a bankruptcy judge buys Team Obama’s argument that the hedgies should take
Those plants will be closing down but no worries as the workers will get their whole paycheck in the meantime.
|Chrysler President Tom LaSorda would not say how many plants would shut down early or how many suppliers had cut off shipments on the bankruptcy news.|
"Hopefully most of the suppliers will continue to supply us," he said.
Most of Chrysler's hourly workers will receive about 80% of their normal pay during the shutdown under unemployment benefits and supplemental pay in the union contract.
NYTIMES: The Lenders Obama Decided to Blame or as I call them Heroes!
But the NYTIMES and the rest of the media is eagerly at work whining about them not bowing to Black jesus's orders.
Last two days with the tea party reference and now this it shows how easy it is to get under his skin when you don't tow the line.