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Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (10171)	3/30/2009 4:10:59 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 103300

Re: "bankruptcy would have been smarter to start with" I've always thought that the bankruptcy option had a lot to recommend itself --- after all, only a bankruptcy JUDGE has the legal authority to BREAK CONTRACTS to reduce costs so that the company will be able to emerge from the reorganization process as a viable business. So, unless all this jaw-boning can bring all the major parties (pensioners, bond holders, dealers, workers, unsecured creditors, and the piddling few shareholders who are left, etc.) to reduce their claims by enough to result in a viable business... I suppose they can always hold out the option of a bankruptcy as a cudgel to knock heads together. In any event... I think what they are looking for here is a "controlled" reorganization... not an "uncontrolled" one. (in other words: they don't want it to drag on for three or four years and result in ALL of GM's business evaporating. They want a FASTER reorganization.)

To: GROUND ZERO™ who wrote (10171)	3/30/2009 4:13:03 PM
From: DuckTapeSunroof	Respond to of 103300

Canada rejects Chrysler, GM plans, but offers loans Mon Mar 30, 2009 2:03pm EDT reuters.com OTTAWA (Reuters) - Canada said on Monday that current plans set out by the Canadian branches of General Motors Corp and Chrysler LLC do not go far enough to make them viable, but it offered C$4 billion ($3.2 billion) in bridge loans to tide the companies over while they restructure. The federal government and the provincial government of Ontario will close an interim financing deal with Chrysler on Monday for C$1 billion, advancing C$250 million right away. Another C$500 million will be disbursed in early April and the remainder as of May 1. "Very clearly, if the money had not been forwarded today, (Chrysler) would not have been able to meet payroll today or tomorrow," Tony Clement, Canada's industry minister, told reporters in Ottawa.. "So we were faced with this choice of a disorderly bankruptcy ... we felt now was the time to announce this." GM is eligible for up to C$3 billion in bridge loans and officials said the government hoped to close that deal "very soon". Ottawa and Ontario first announced the short-term financing in December but neither company had drawn on it. No further financing will be provided unless acceptable plans are produced, and the government would have the option of calling the loans. "The plans submitted by General Motors and Chrysler to the government of Canada do not go far enough to ensure the long-term viability of these companies," Clement said. In addition to proving their viability, the companies will have to commit to maintaining 20 percent of their North American production in Canada. Clement said the Canadian government was working closely with the U.S. government on the file. On Monday, Washington demanded tough new restructuring plans at GM and Chrysler and forced out GM's chief executive. Ottawa endorsed plans arrived at jointly with the United States under which Chrysler would have until the end of April to come up with a restructuring plan that has to include a link-up with Italy's Fiat SpA Chrysler will also have to find a compromise with the Canadian Auto Workers union on cutting labor costs. The union recently agreed to reopen the three-year contract deals it reached with the companies last May to help GM and Chrysler qualify for government aid. The CAW reached a deal with GM that the company said will eliminate nearly C$1 billion of legacy costs from its books, on top of cutting active labor costs by more than C$7 an hour. Chrysler has said it needs a better deal from the union, or it could be forced to pull its operations out of Canada. Clement signaled that he does not think that GM's deal with the CAW goes far enough. "For General Motors, this means a more fundamental restructuring of its products and its operations, including its costs, and this also includes continuing concerns about their legacy costs here in Canada," he said. GM would have until the end of May to present a renewed plan to the government. The CAW will hold a news conference on Monday to comment on the announcements by the Canadian and U.S. governments. "While we believe in the long-term viability of these companies, I agree with (U.S.) President (Barack) Obama that we must also consider the possibility of court-supervised restructuring," Clement told a news conference Unlike the United States, Canada will not require the dismissal of any executives at the Canadian branches, but it will limit executive compensation. The federal government is extending two-thirds of the short-term financing, with the provincial government responsible for the other third. The three-year loan to Chrysler will bear a minimum interest rate of 5 percent and will be callable if the restructuring plans are not deemed acceptable by the government. As added security on the loans, Chrysler is being required to provide additional interest-bearing notes equal to 6.67 percent of the total loan extended to it. ($1=$1.26 Canadian) (Reporting by Randall Palmer and Louise Egan, writing by John McCrank; editing by Peter Galloway) © Thomson Reuters 2009 All rights reserved