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Barnstormin’: The Case Against Chrysler


Barnstormin’: The Case Against Chrysler

Normally, this column runs on Monday afternoons, but seeing as how this is a breaking news topic and the entire subject matter may be rendered moot by the end of the day, we’ve broken with the traditional formatting to bring you this piece early in the day. — Brian 

 

I pride myself on being a pretty decisive guy. Given two choices or sides to an issue or problem I take one and move in that direction. I am really not someone who flip-flops. If I’ve chosen the wrong path, I’ll back up, adjust my course and forge ahead. There’s one recent issue that has me stuck though. It’s this business with Chrysler, some Indiana State pension funds, and now, the Supreme Court of the United States.

If you’ve not been following this saga, we kind of called this exact situation happening in a news item about a week ago. The Indiana State Attorney General has been arguing on behalf of the group of pension funds on the grounds that the sale of the company is unconstitutional because it throws out of sequence the order that lenders and creditors will be paid back their debts after the sale. The pension funds would be out roughly 40 million dollars if the proposed sale to Fiat, the UAW, and the US and Canadian governments is completed.

After being heard by several courts, the 2nd US Circut Court of Appeals in New York gave the green light to the sale. Just a couple of hours later, an emergency stay request was filed with the US Supreme Court to put a stay on the sale and allow the court to hear the case. In the event that this stay was granted it would be weeks at a minimum and months at most probable until the court actually saw the case argued. Then there would be the delay in issuing a decision. All this adds up to a scenario that would most likely see Fiat throwing it’s hands up and walking away, leaving the carcass of Chrysler to be picked apart by the creditors and lenders that kept it running to the point that it imploded. In short, Chrysler would not exist and its factories would be liquidated to pay down debts.

Here’s my conundrum. I really don’t want Chrysler to be owned by a foreign entity (again!) and frankly, I’m not comfortable with the government owning a controlling stake in any company, especially an automotive one, so part of me is rooting for Justice Ginsberg to grant the stay and review the case on the grounds that it is a constitutional matter that raises questions that need to be completely examined to determine what the government is allowed to do and not to do. It would be a watershed case that would literally outline the boundaries of power that the Federal Government has in terms of its ability to regulate the economy. I’m all for getting those rules scribed into stone so we know what is and isn’t kosher going forward.

Unfortunately, it’s too easy to just take that view and run. By seeing the above scenario out, there will be massive job losses at both Chrysler directly and from its dealers and suppliers, and then there are the ancillary businesses that operate around plants and other entities tied to Chrysler. It seems that rooting on the court case scenario is effectively rooting against the working people at Chrysler who wake up each day wondering if they will have a place to work. I cannot fathom the awfulness of that.

In my research for this column I have found that the Supreme Court rarely, if ever grants these types of stays. Normally there is just too much riding on the pressing issue that has brought the case to the court and they feel that their ability to react to the situation is insufficient. This may be an exception though, as it seems to beg at the core things that our country and governmental system are based on. The court has to weigh the amount of “harm” a stay would cause and if it were found to be too high, it could move to reject the case. Undoubtedly there will be lots of harm if the case is heard, so it’s out, right? Wrong. If the case is without precedent the court may decide that the matter itself is so important that the level of harm caused by putting a stay on the sale does not outweigh the implications of failing to take on the case and settling the issue. It’s heady stuff.

Throwing another log on the fire are two more groups who have filed stays. They include a collection of consumer groups and a group of people who have been injured and maimed in Chrysler cars that would effectively lose the ability to sure the company if the sale was allowed to go through as the company would essentially be immune to future product liability suits for any vehicles that it built up until the moment of the sale.

Admittedly, I am a Supreme Court junkie and I took as many Constitutional Law classes as I could in college because the issues that make it in front of the court are the ones that define us as a society. I’d argue that there is no bigger issue than defining exactly what the boundaries of power are with respect to the Federal Government.

Choosing a side in this fight is as close to impossible as anything I’ve applied mental energy to lately. It seems to break down to either blindly supporting the government and following in lock step with what they say or rooting against fellow citizens, the vast majority of which are probably normal people like me who love their kids, work hard to do the best for them, and go to bed with that lingering American hope that tomorrow will be a little better than today.

This is one time I certainly do not envy the Justices on the highest court in the land.

 


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