(CBS) Chrysler's sad tale that led to this week's bankruptcy hearing in New York is not only an important business and political story. It also encompasses morality, the rule of law and strong-arm tactics used by some politicians.
Our story begins with the slow downfall of Chrysler, which succumbed to bankruptcy after experiencing a steep sales decline of 48 percent in one year. During its slide, Chrysler borrowed money from lenders and in return signed a contract promising that as so-called senior creditors, they'd get paid before anyone else if the company went under.
These creditors, by the way, represent something of a cross-section of America: the University of Kentucky, Kraft Foods' retirement fund, the Bill and Melinda Gates Foundation, pension funds, teachers' credit unions, and so on.
I am not sure where the problem is. The gov't was trying to keep Chrysler out of BK. They wanted the senior creditors to accept something less than 100%. The senior creditors refused. That pissed Obama off. Then Chrysler proceeded into BK. The senior creditors will get their 100%. So they didn't lose.
Frankly, I like a gov't that takes an aggressive position in these negotiations instead of letting the private sector walk all over it. Obama did nothing dishonest. If he was looking out for the little guy, the unions, then good.......that's a rarity in gov't esp. under the Rs. |
