Will Chrysler Survive?

UPDATE AT BOTTOM OF POST!!

My personal opinion is a qualified “yes.”  But it’s not going to be pretty by any stretch of the imagination.

Today is the day that all phases of the government’s requirements for more funding were to be met.  And they almost made it happen.

While I’m writing this post, the announcement came through that the White House will force Chrysler into bankruptcy.  Exactly how this will affect the deal with Fiat, the newly approved contract with the UAW, and the bondholders is anyone’s guess since the fate of Chrysler will now be in a bankruptcy court.

Where the situation stood before the announcement was this:

  • Fiat announced that they would sign an agreement to form an alliance with Chrysler.
  • The UAW overwhelmingly ratified an agreement to cut benefits, cost of living increases, overtime pay, and bonuses.
  • The largest bondholders that held 70% of the debt agreed to a reduced settlement of debt.

Where the deal fell apart is that the remaining 30% of debt could not be settled with the bondholders.  Apparently, the bondholders could not tolerate for less than 30¢ on the dollar offered.  And in many respects, I can understand their position – I would not want to settle for that amount if my investment was guaranteed with company assets which are probably worth more that the offer.

The bankruptcy route that Chrysler will most likely take is Chapter 11 with Section 363(b), which is a provision of the bankruptcy code that allows companies to quickly exit bankruptcy by selling their most valuable assets in an auction, and then creating a new company without the liabilities. The “bad” assets of the company remain in bankruptcy and are liquidated.

The most valuable assets of Chrysler is Jeep and the minivans.  After that, there are a bunch of ho-hum cars, fuel-thirsty trucks, and so-so powertrains.  So if Jeep and the minivans are sold to the highest bidders, then what’s left of the company?  Not much, I’m afraid…

Now with Chrysler on the verge of declaring and filing for bankruptcy, will Fiat still ink the deal?  If I were them, I wouldn’t.  Instead, I would sit back and make offers for the pieces I want – dealer networks, maybe a plant here or there to build product in the United States, and perhaps the Jeep nameplate.

Where the UAW is going to end up with this latest development is anyone’s guess.  In some respects, the just approved contract change just might be thrown out by the bankruptcy judge.

But it doesn’t matter if Chrysler emerges from whatever bankruptcy filing, agreements, or deals if it doesn’t do the one thing that keeps any business going.  That is to sell their product.  And here’s where I think that Chrysler will have trouble.

President Obama has stated repeatedly that the state of the economy is dire, and could take up to a year to improve.  Couple that with people either losing their jobs or fearing the loss of the job will inhibit buying a big-ticket item such as a new car.  Those consumers will either fix up their old car or buy a used car.  And that’s bad news for all the car makers.

Chrysler is just the beginning.  In 30 days, we will see what happens with GM, and I’m going to predict that that situation will be just as ugly as Chrysler.

UPDATE:  FIAT SIGNS DEAL WITH CHRYSLER!!

It was announced this afternoon that Chrysler and Fiat have signed an agreement.  Full details have yet to be announced.

In retrospect, I probably shouldn’t be surprised.  Fiat is only bargining with technology, not money, something they already have & can readily share.  In exchange, they get seats on the Board and 20% of the company with an option to aquire another 15%.

In a related announcement, Bob Nardelli, Chief Hachetman of Cerberus, is stepping down from the head of Chrysler.  About time…

Terror Over New York

Yesterday, New Yorkers were terrified by a low-flying jumbo jet pursued by F-16 Fighters.  Panic ensued, and people left their jobs to flood the streets expecting the worst.

Who was behind such a dastardly deed?  As it turns out, the White House….or more accurately, a staffer in the Obama Administration.  A certain Louis Caldera, the White House military director, authorized the flight over Manhattan.

And here’s the reason as described by the New York Daily News:

Sources said the reason for the stunt was to create souvenir pictures of a customized Boeing 747, which serves as Air Force One when the president is aboard.

Photos of the plane flying over the Statue of Liberty were to be given out to family, friends or supporters.

So the reason for the flight was to create souvenir photographs or postcards for Obama supporters and/or travelers on Air Force One?  Who’s bright idea was this?

Does anyone else think that this is a waste of taxpayer money?  Flying Air Force One isn’t cheap by any stretch of the imagination, and to add a military fighter escort just adds to the cost.

But then again, asking government run by elitists to be fiscally responsible is way too much to ask for, especially when the money is someone else’s.

Bastards…

Power Outage

My apologies for not writing or visiting around.  The weekend was very eventful.

My wife entered her first 5K run on Saturday morning, and the weather was absolutely perfect.  Then came the afternoon and the storms.

Around 2:00 Saturday, the storm moved through with 50 mph winds, and the power went out.  Power didn’t come back until late Sunday night.  We’re fortunate – there are still some people without power.

The recent experience with storms and the extended power outage got me to thinking, which is always a dangerous activity.  How many “environmentalists” could actually survive in a primitive world?

From an earlier post, it was shown that “the good old days” was a struggle not only to survive, but to compete with your neighbor for food.  If you stop to think about it, modern society and its conveniences have a lot going for it.  Could those people who are wanting to return to a simpler time really manage to survive and be happy?

Somehow, I don’t think that a lot of those people could live their lives without electricity, running water, and bathroom “facilities.”  Having camped out a few times in my life, a visit to the campground outhouse on a cold morning doesn’t exactly endear me to that life on a constant basis.  Somehow, I think they would complain what they gave up instead of what part of the world they were saving.

Along these line of thought, what would the average person do if there were an emergency where the basic services such as electricity and water were no longer available.?  Actually, the better question would be is can our society exist without those essential services?

I think you know the answers to those questions…

Government Car Warranty Repair

A couple of weeks ago, President Obama went out of his way to reassure new car owners that should GM or Chrysler declare bankruptcy, the government would guarantee the warranties on the vehicles.  While the intent was admirable, the effect was less than desirable – people stayed away from buying cars.

Perhaps they were thinking along the lines of the following scenario:


Scene:  Car owner pushes a Buick to a Government authorized repair facility.

GM Technician:   Welcome to the Obama Auto Repair Center!  How can I help you?

Car Owner:  Whew, my engine fell out a few miles down the road and this car is only a year old!  I’m glad it’s under warranty (produces warranty)

GM Technician:  I see, hmm, are you sure you need an engine?

Car owner:  What?!?!  How can you say that!?   I want an engine put in my car now!

GM Technician:  No need to be rude sir,.. (Types on a portable laptop)…well!  The only reports of engines falling out from GM cars are from owners who have a Chevy.   So far, no reports of engines falling out of Buicks. It must have been something you did!  

Car Owner:  But..but how can you say that?   My car is a Buick and the Chevy model of the same type has had reports of it’s engine falling out!

GM Technician:  Yes, and if your car was a Chevy, we would fix it for free!

Car Owner:  Well, how much will it cost me to fix it?

GM Technician:  Thirty thousand!

Car Owner:  Thirty Thousand!?!?   I could buy a new car for that!

GM Technician:  And don’t think we wouldn’t like that, but you should just opt for the repair – otherwise, you need to pay the 50% sales tax.

Car Owner:  (Sigh) Ok, just repair it.

GM Technician: Ok!  Say, would you like to put a Chevy motor in it?  They are the same car you know!


Hat tip to JobSchmob.com.

Coincidence?

As many of you know, today is Earth Day.  The Media as well as various stores and businesses have promoted today as “let’s take care of the Earth”.  Even Google has a Earth-Day graphic for its search page.

What hasn’t been mentioned is today is Lenin’s birthday.  Coincidence?  After reading the below, you decide.

Recently, the EPA declared that greenhouse gases linked to climate change “endanger public health and welfare,” setting the stage for regulating them under federal clean air laws. This declaration means that the EPA is more than willing to assume authority in regulating carbon dioxide emissions from the citizens of the United States in order to protect the public’s health.  While initially targeting vehicles and industry emissions, will the EPA stop there?  Since humans and every living animal exhales carbon dioxide, can you just think of the impact that if taken to extremes, limits on the number of people in your house, how big a house you can have, the number of pets, etc.?

We have already observed the actions of government in dealing with businesses, especially the automotive industry.  Regulations including CAFE have done nothing to shift consumer preferences for large vehicles.  Higher gasoline prices did what government couldn’t – move the consumer to higher mileage lower polluting vehicles.  Now with the government basically in the driver’s seat (pun intended) of two of the three domestic automakers, government now has the control of dictating the direction of the course automakers must take.  The recent Administration’s direction to the automakers to manufacture “green vehicles” powered by “green energy” is just the latest in this saga.

Lenin stated in his “Collected Works Volume 30” from 1917:

We must show the peasants that the organization of industry on the basis of modern, advanced technology, on electrification which will provide a link between town and country, will put an end to the division between town and country, will make it possible to raise the level of culture in the countryside and to overcome, even in the most remote corners of land, backwardness, ignorance, poverty, disease, and barbarism.

Does this sound familiar?  And just who are the peasants, and who are the “elite” that will show the peasants the way?

Now before anyone wants to tell me that I’ve flipped out and need to be placed in a padded room with members of the Tin Hat Society, please consider the following.

There are responsibilities that each and every person on this planet must assume in order for society to continue to function and provide a world for our offspring to safely live in.  This means that each person must do their part willingly, without coercion by regulations & government.  We don’t pour used motor oil on the ground, we limit our burning of waste, and we responsibly dispose of items that pose a hazard to the environment.  These items are part of our modern society which have allowed us to live in the high standards that we are accustomed to.

Radical environmentalists have stated that we need to get back to our roots, the basics that we, mankind, have forgotten.  In other words, we need to regress back to the “good old days.”

The late Michael Crichton had this to say about the “good old days”:

There is no Eden. There never was. What was that Eden of the wonderful mythic past? Is it the time when infant mortality was 80%, when four children in five died of disease before the age of five? When one woman in six died in childbirth? When the average lifespan was 40, as it was in America a century ago. When plagues swept across the planet, killing millions in a stroke. Was it when millions starved to death? Is that when it was Eden?

And what about indigenous peoples, living in a state of harmony with the Eden-like environment? Well, they never did. On this continent, the newly arrived people who crossed the land bridge almost immediately set about wiping out hundreds of species of large animals, and they did this several thousand years before the white man showed up, to accelerate the process. And what was the condition of life? Loving, peaceful, harmonious? Hardly: the early peoples of the New World lived in a state of constant warfare. Generations of hatred, tribal hatreds, constant battles. The warlike tribes of this continent are famous: the Comanche, Sioux, Apache, Mohawk, Aztecs, Toltec, Incas. Some of them practiced infanticide, and human sacrifice. And those tribes that were not fiercely warlike were exterminated, or learned to build their villages high in the cliffs to attain some measure of safety.

How about the human condition in the rest of the world? The Maori of New Zealand committed massacres regularly. The dyaks of Borneo were headhunters. The Polynesians, living in an environment as close to paradise as one can imagine, fought constantly, and created a society so hideously restrictive that you could lose your life if you stepped in the footprint of a chief. It was the Polynesians who gave us the very concept of taboo, as well as the word itself. The noble savage is a fantasy, and it was never true. That anyone still believes it, 200 years after Rousseau, shows the tenacity of religious myths, their ability to hang on in the face of centuries of factual contradiction.

There was even an academic movement, during the latter 20th century, that claimed that cannibalism was a white man’s invention to demonize the indigenous peoples. (Only academics could fight such a battle.) It was some thirty years before professors finally agreed that yes, cannibalism does indeed occur among human beings. Meanwhile, all during this time New Guinea highlanders in the 20th century continued to eat the brains of their enemies until they were finally made to understand that they risked kuru, a fatal neurological disease, when they did so.

More recently still the gentle Tasaday of the Philippines turned out to be a publicity stunt, a nonexistent tribe. And African pygmies have one of the highest murder rates on the planet.

In short, the romantic view of the natural world as a blissful Eden is only held by people who have no actual experience of nature. People who live in nature are not romantic about it at all. They may hold spiritual beliefs about the world around them, they may have a sense of the unity of nature or the aliveness of all things, but they still kill the animals and uproot the plants in order to eat, to live. If they don’t, they will die.

Environmentalism by itself is not a bad thing.  I am an environmentalist, but I’m also a realist.  The individual is responsible for their actions, not a governmental body nor a special counsel of the UN.  Countries are responsible for what they allow within their borders.  Anyone who remembers the Love Canal knows that there is corporate responsibility as well.  When corporations and individuals fail to meet the requirements of society, that is when government steps in.  Once government steps in, government will never step away.

So what has now happened is that government is showing the silly peasants that they cannot take care of themselves because the peasants have screwed up and thus transferred their responsibilities to the government.  And for the most part, the peasants were happy until the costs and moronic stupidity of the government became too blatant to ignore.

Enter Global Warming/Climate Change and it’s child, Earth Day.  The distraction that the elites needed to call attention to something that appeals to the responsible person in most of us – a clean Earth for our children.  The sad part of it is that Global Warming/Climate Change is not a known fact, but a theory that is more conjecture and consensus.  And consensus is the refuge of scoundrels because it makes the erroneous claim that the matter has been settled.  Which reminds me of this quote:

The great masses of the people will more easily fall victims to a big lie than to a small one.

And who stated the above?  Adolf Hitler.

The masses of people have a new leader, a new cause, and very few questions.  But don’t worry – government will take care of everything, right?