That didn’t take long
This morning, the President told Chrysler it needed to reach a survival deal with the Italian carmaker Fiat. And then about 7 seconds later, Chrysler said the deal was done: “We are pleased that Chrysler, Fiat and Cerberus have reached agreement on a global alliance, supported by the U.S. Treasury.”
The quick and dirty analysis from the Wall Street Journal:
“In essence, the U.S. administration is forcing Chrysler into an alliance with Fiat, but reversing the order: First an alliance and then, possibly, the funding,” said an analyst at Mediobanca. “That implies more risk for Fiat, which would be taking a stake in a company in a worse financial state than previously thought, which could improve if the government were to give it more funding.”
It should be noted that after Chrysler issued its statement, the company came back again, saying there are still some things to be worked out. So I guess “reached agreement” means in principle.
Meanwhile at GM, in his first day on the job, new CEO Fritz Henderson is not ruling out bankruptcy:
“Our strong preference is to complete this restructuring out of court. However, GM will take whatever steps are necessary to successfully restructure the company, which could include a court-supervised process,” Henderson said.
The man Henderson replaces, Rick Wagoner, will get about $20 million in retirement pay, according to documents reviewed by ABC News. From the story:
“I think it’s another perfect example of why there’s so much frustration among working people,” said Tiffany Ten Eyck of Labor Notes, a Detroit-based independent publication covering unions. “I wouldn’t mind retiring out of an industry in crisis with a $20 million package.”
Under GM’s deal with the Treasury, the company cannot pay severance, but the deal doesn’t preclude retirement benefits.
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