Thursday, April 30, 2009
The last American car
Chrysler's bankruptcy filing may have bought the beleaguered carmaker a little more time in the short term, but signals the end of the U.S. automobile industry as any of us have ever known it. When the third-largest domestic car company emerges from court protection in August, the entire industry will not look anything like it does now. If the U.S. government gets its way, and there doesn't seem to be much reason to think it won't, Chrysler will be majority-owned by the United Auto Workers healthcare trust fund and merged with Fiat, which will be tasked with introducing the innovative, gas-efficient new models that stumped its previous owners for 40 years. If it is successful running Chrysler, Fiat -- an Italian company -- will end up the majority owner, according to the Reuters international news service. General Motors, once the symbol of American capitalism, is laying off tens of thousands of workers, shutting down subsidiaries and will wind up majority-owned by the U.S. government. Bondholders and previous shareholders will end up with very little. Only Ford, the second-largest U.S. automaker, has not mortgaged its present and future to borrow billions from the feds. U.S. President Barak Obama endorsed the Chrysler bankruptcy filing, saying it would save jobs at the automaker, and at auto parts companies and other firms that supply it. But Obama criticized some of Chrysler's bondholders and creditors that refused to agree to a proposal to reduce the automaker's debt by nearly $5 billion. "I stand with Chrysler's employees and their families and communities," he said. "I don't stand with those who held out when everybody else is making sacrifices. That's why I'm supporting Chrysler's plans to use our bankruptcy laws to clear away its remaining obligations." The bankruptcy filing evoked memories of 1980, when the United States provided more than $1 billion in loan guarantees to keep Chrysler afloat.