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Barnstormin': The Case Against Chrysler

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  • Barnstormin': The Case Against Chrysler


  • #2
    Re: Barnstormin': The Case Against Chrysler

    Here's my observation -
    Investors - whether it's pension funds or individuals or any other entity - fail to realize that these investments are, more or less, a gamble. You're betting that the company will prosper, and they, of course, are trying to do that. I realize that the argument is about who gets to gnaw on the carcass, but there is more advantage to everyone if that animal can remain alive, even though an individual investor may lose out in the pecking order. Remember, they started out gambling on this company in the first place. In America we have the right to take a chance and hit it big. We also have a chance to lose it all - this coin has two sides.

    I'm sorry that the pension funds chose poorly, but Chrysler has to do what it has to do to survive. To do anything else would be irresponsible. Here's hoping they can make a go of it and I hope Fiat proves to be a helpful partner.

    Dan

    Comment


    • #3
      Re: Barnstormin': The Case Against Chrysler

      No envy here either.

      Some will be damned if you do.
      Some will be damned if you don't.

      There is no 'win'.
      Life is short. Be a do'er and not a shoulda done'er.
      1969 Galaxie 500 https://bangshift.com/forum/forum/ba...ild-it-s-alive
      1998 Mustang GT https://bangshift.com/forum/forum/ba...60-and-a-turbo
      1983 Mustang GT 545/552/302/Turbo302/552 http://www.bangshift.com/forum/forum...485-bbr-s-83gt
      1973 F-250 BBF Turbo Truck http://www.bangshift.com/forum/forum...uck-conversion
      1986 Ford Ranger EFI 545/C6 https://bangshift.com/forum/forum/ba...tooth-and-nail

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      • #4
        Re: Barnstormin': The Case Against Chrysler

        Stock market is Vegas - you pays yer money and you takes your chances. You win or you lose. All this whining about losing big bucks - hey, bet on a different horse next time and hope you do better - or just buy savings bonds and shut up. Will it hurt the finds and their investors? Sure - and I feel for them, but I also tend to think "get in line with the rest of us." I could last 20 times longer in retirement drawing a greeter's salary at Walmart than I can with whats left in the 401K. It did go up this last quarter and I figure 5 more quarters of substantial increases (not likely) would get us back almost to even.

        Comment


        • #5
          Re: Barnstormin': The Case Against Chrysler

          *Shakes head, reaches for bottle of Excedrin*

          As was stated previously, this is flat-out a no-win situation.

          Being as I'm a resident of the state of Indiana, I'll see either:

          A) Fellow Hoosiers(don't call us Indianans......it sounds dumb) will be out of work and on unemployment, which will virtually guarantee tax hikes in order to further fund the system

          OR

          B) A tax hike of some form in order to cover the State Police Pension Funds........

          Maybe it's time to move to a different state........oh yeah, good luck selling my house.........sounds like a Monday Excuse to Go Home and Drink.

          Damn you Lohnes..... ;D

          Comment


          • #6
            Re: Barnstormin': The Case Against Chrysler

            Great article Brian,
            There's a saying that goes - "a case comes to a successful conclusion if all parties are equally unhappy". At this point, all parties are unequally unhappy because our well-meaning government used the publishing of names (which resulted in death threats) to force people to accept a the gift of Chrysler assets to Fiat.

            There is a law of unintended consequences that is going to apply quite forcefully here. The problem isn't so much Chrysler, it's the entire business world. You invest money into other enterprises based upon a set of rules; if those rules change for convenience, there is no rule and the entire business world would be thrown into anarchy.... thus, if the Court changes the rules (meaning finds in favor of Chrysler), business truly will be a gamble; the rule of law will be non-existant and anarachy will likely follow.

            It's too bad about Chrysler, it's really too bad about the people who work at Chrysler; but the stakes are too high to change the rules now. I hesitate to say this because it's not my intent to start an argument or recriminations - but it has to be said, if there is no rules to govern business; thus, an investor cannot rely upon the government to be the neutral third party who provides decisionmaking abilities - there cannot be investment; and our entire society will not survive as we know it.... so while the Chrysler folks will certainly be hurting; it pales in comparison to how they'll hurt even more if there's no way to get them back to work.

            Last, but certainly not least, pension funds are required by law to invest in safe investments - investing in mortgages; Dow listed blue chip companies; or government bonds are their only investments allowed.... knock out one of those investment options and then watch the lawsuits begin by people who expected to have pensions to live on suddenly be forced to live on SS. The argument will be "when did you know the investment was not safe?"

            Doing it all wrong since 1966

            Comment


            • #7
              Re: Barnstormin': The Case Against Chrysler

              That is EXACTLY correct, Buickguy. Because the bankruptcy rules were changed (without precedent or legal basis, btw), it creates a financial situation where nobody has any confidence about how their investments will be treated in the future.

              For those who say it was like "playing in Vegas", you're missing the point. These people are not trying to get ALL of their initial investment back. They are just trying to get what is "reasonable" based on existing law and precedent. When they made that "bet", it was with the knowledge that bankruptcy was handled by law in a certain manner concerning about distribution of assets. Now, we have a group of people come in, throw that all out, divide things up however they want.

              The result of this (assuming it stands) is that nobody will have confidence in business investments, and in particular this will hurt small businesses and startups. The effects of this financial theft (and that is exactly what it is, make no mistake) will have serious implications.

              The pension funds are absolutely right. They have a reason to be upset. I don't know how it will turn out, but the one true fact is that there is no winner here except possibly the UAW in this deal.

              Comment


              • #8
                Re: Barnstormin': The Case Against Chrysler

                The rules were changed so Obama could pay back the unions for their support.

                Comment


                • #9
                  Re: Barnstormin': The Case Against Chrysler

                  [quote=ponchoman ]
                  That is EXACTLY correct, Buickguy. Because the bankruptcy rules were changed (without precent or legal basis, btw), it creates a financial situation where nobody has any confidence about how their investments will be treated in the future.

                  For those who say it was like "playing in Vegas", you're missing the point. These people are not trying to get ALL of their initial investment back. They are just trying to get what is "reasonable" based on existing law and precedent. When they made that "bet", it was with the knowledge that bankruptcy was handled by law in a certain manner concerning about distribution of assets. Now, we have a group of people come in, throw that all out, divide things up however they want.

                  Ponch, BuickGuy.....




                  That is 100% correct.
                  The CEO's had guaranteed, legally-binding, PRECEDENT SET, existing law to protect their (and the companies) legal interests. Things thats were AGREED TO<<<<< before employement.
                  The Pension funds had a guaranteed, legally-bound, PRECEDENT SET, set of rules they were (are) FORCED to abide by.<<<Pensions are LEGALLY BOUND to abide by a certain governmental set of rules for investemet!!!!!

                  The government is overstepping not only Constitutional boundaries, but hundreds of years of PRECEDENT SET rules concerning the interests of business', investors, and general stock-holders of major (and minor companies, due to trickle-down).

                  This is an absolute nightmare being played out for the general, non-interested, public, and the "opinion" getting politicians to gain from.

                  Nothing is going to come from governmental's "selective execution" of Executive power....except re-election.
                  And the changing of the entire business environment in the United States....forever.
                  And not in a good way, either.

                  You think its tight now. Wait a while.

                  Business owners' need to re-evaluate every aspect of their entire operation. Soup to nuts.

                  After this debacle, the rules as we've known it, have changed. Nothing is sacred. Nothing is guaranteed. Nothing (after the rulings are set...more precedent)...will be the same. Even precedents.

                  Comment


                  • #10
                    Re: Barnstormin': The Case Against Chrysler

                    I side pretty squarely with ponco and buick . The investors are what I assume are the ownners . Sort of like if I bought say 20% of a Impala SS and say 5 other guys owned 80% . If we went drag racing this beast ( it has a 572 lets say ) and the driver wreaked it mid way thru the run, I still own 20 of a wreaked Impala SS with a 572.

                    Comment


                    • #11
                      Re: Barnstormin': The Case Against Chrysler

                      Supreme Court will review the case.....sale on hold. WOW. :o

                      The Supreme Court threw a wrench into the plans to have a quick bankruptcy process at Chrysler LLC, delaying the company's combination with Italian automaker Fiat.


                      Brian
                      That which you manifest is before you.

                      Comment


                      • #12
                        Re: Barnstormin': The Case Against Chrysler

                        "As part of Chrysler?s restructuring plan, the company?s secured debtholders will receive $2 billion, or about 29 cents on the dollar, for their combined $6.9 billion in debt. The Indiana funds bought their $42.5 million in debt in July 2008 for 43 cents on the dollar.

                        The funds also are challenging the constitutionality of the Treasury Department?s use of money from the Troubled Asset Relief Program to supply Chrysler?s bankruptcy protection financing. They say the government did so without congressional authority.

                        The consumer groups and individuals with product-related lawsuits are contesting a condition of the Chrysler sale agreement that would release the company from product liability claims related to vehicles it sold before the ?New Chrysler? partnered with Fiat is created.

                        Individuals with claims against ?Old Chrysler? would have to seek compensation from the parts of the company not being sold to Fiat. But those assets have limited value and it?s doubtful that there will be available to pay consumer claims.

                        Separately, a senior Obama administration official says Fiat will shake up management and change the culture of Chrysler if the courts allow the sale of its assets to the Italian automaker.

                        The official says management changes will go deeper than the departure of CEO Bob Nardelli and Vice Chairman Tom LaSorda. The official spoke on condition of anonymity because the changes have not been made public."

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                        • #13
                          Re: Barnstormin': The Case Against Chrysler


                          I'm also glad the rule of law prevailed, much more is at stake then headlines (or the spin doctor's wording).
                          Doing it all wrong since 1966

                          Comment


                          • #14
                            Re: Barnstormin': The Case Against Chrysler

                            We all seem to be between a rock and a hard place here. That includes Chrysler ( and maybe GM as well.), the employees, the government, even all of us right here on this forum. Like Brian has so eloquently said this is not an easy issue to take sides on. It is certainly true that thoughout this whole economic debacle (mortgage problem, banking problem, unemployement problem, business failure problem and all the rest) some folks have done some really dumb things (buying houses you can't afford, etc.), some folks have done some terribly illeagal things, and some people have done some downright unethical, though maybe not illegall, things. That said dwelling on the past and pointing fingers is not going to help anything or anybody. Nothing that can be done to fix or slow down this mess is going to be something most of us want to happen. The bottom line is, however, something had, and still has, to be done or lots more of us will find our personal economies slipping into the proverbial abyss.

                            Like it or not just letting the chips fall where they may will not improve anything. Such acts will only make things worse. Somehow there has to be a shock applied to the system to get things going again. That shock will have to be a big one and only the government or some large and successful company (domestic or foreign) can do that. Sad but true.

                            I am really surprised the Supreme Court placed a stay on the Chrysler/Fiat deal. But there are Constitutional issues in question here.

                            So we have to choose between additional government bail outs of Chrysler or let a foreign car maker take it over. Its a flip of the coin that seems to have no winning sides. However, if one or the other doesn't happen, every one of us will be on the loosing side.

                            And let us not forget that as more folks find themselves unemployed, or under employed, the less tax money the government will take in. Roads will suffer, education will suffer, and on and on and on. We can complain about increased taxes, but without them a lot of stuff that we depend on will not be there.

                            Oh, yea. Once this is over and done and things brighten up economically speaking, then we can go ofter the bad folks that led us to all of this and begin to make changes to prevent it from happening later on. Doing that now will only take our eyes of the ball, so to speak.

                            Comment


                            • #15
                              Re: Barnstormin': The Case Against Chrysler

                              This article has more of numbers involved and puts the case in a little different light.


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