Talks Tip Chrysler Toward Bankruptcy
As Negotiations With Creditors Falter, Officials Finalize Details of Restructuring
By David Cho, Peter Whoriskey and Kendra Marr
Washington Post Staff Writers
Thursday, April 30, 2009
The Obama administration last night planned to send Chrysler into bankruptcy, replace chief executive Robert L. Nardelli and pump billions of dollars more into the effort, all in hopes the company can emerge from court proceedings as a reenergized competitor in the global economy.
Government officials clung to 11th-hour hopes last night that bankruptcy could be averted, but talks broke down with Chrysler’s creditors. A bankruptcy filing could happen as soon as today.
. . .
Under the administration’s detailed court strategy, ownership of Chrysler would be dramatically reorganized, the leadership of Italian automaker Fiat would take over company management and the U.S. and Canadian governments would contribute more than $10 billion in additional funding. . . Its ownership would be divided, with the company’s union retiree health fund receiving a 55 percent stake, Fiat would claim as much as a 35 percent share and the United States would take 8 percent. The Canadian government would receive two percent.
Present stockholders are wiped out. Sorry ’bout that folks, but bankruptcy is a hard road and Chrysler (like General Motors) was just not quite too big to fail. The United Auto Workers are in the saddle, those guys who some say broke the industry.
Some say otherwise, myself included.
There is only one equitable place left for union representation and that is on the boards of directors of the companies whose workers they represent. Labor and management can no longer afford to stand at odds with one another. A win for one can no longer be a loss for the other. The new paradigm is creative partnerships that allow business and industry to thrive and make labor a shareholder, as wooed as Wall Street, as valuable to growth as the quarterly uptick.
If creative partnership is too much a buzzword, forgive me that. Labor has always known what is wrong with the mechanism, be it on the factory floor or the crowded cubicles where computer programs rule the workday. You want to know why things don’t work, why profits are so elusive, why absenteeism and burnout are costing more than raw materials? Ask at the bottom. You want to know why job satisfaction is so poor that only wages keep the boat afloat? Send the consultants home and ask at the bottom. The bottom is where truth lies and profit can yet be mined.