Chrysler will not pay back bailout money

[preferredduck]

NEW YORK (CNNMoney.com) -- Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

This revelation was buried within Chrysler's bankruptcy filings last week and confirmed by the Obama administration Tuesday. The filings included a list of business assumptions from one of the company's key financial advisors in the bankruptcy case.

Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler's operations during bankruptcy.

An Obama administration official confirmed Tuesday that Chrysler won't be repaying the loans, though a portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.

http://money.cnn.com/2009/05/05/news...oans/index.htm

full article

so basically we the people will get screwed by all the companies that took the money at some point or another. it makes me sick that we gave a privately owned company that is not publicly traded billions of dollars and the investors walk away without paying a penny back and keep all the money in their pockets and will always be rich. the sad part is these guys have a share in GM too. maybe i should apply for a big ass loan and say, "fuck it" and walk away from it. it also looks like bank of america is going to be 34billion in the red too, so basically we were robbed and put in debt that we will have to pay back. get out the lube guys b/c we are getting screwed.

[Bigt8aford]

good story man, i read up on it more when i get home... at school right now lol

[BanginJimmy]

and the investors walk away without paying a penny back and keep all the money in their pockets and will always be rich.

You might want to recheck your facts. The investors are also getting royally screwed and the only winners in this deal is the union leadership. The unions owned 10% of the bonds sold by Chrysler, yet under the govt forced bankruptcy they are getting a 55% share. The individual and institutional investors are receiving $.30 on the dollar for their investment.


Dont worry about facts though, they are just meaningless drivel anyways.

[dorin48]

You might want to recheck your facts. The investors are also getting royally screwed and the only winners in this deal is the union leadership. The unions owned 10% of the bonds sold by Chrysler, yet under the govt forced bankruptcy they are getting a 55% share. The individual and institutional investors are receiving $.30 on the dollar for their investment.


Dont worry about facts though, they are just meaningless drivel anyways.

^^ too true.

Also $.30 is rounding up lol.

[Total_Blender]

Its not too bad of alternative to Chrysler folding and investors getting nothing.

[BanginJimmy]

Its not too bad of alternative to Chrysler folding and investors getting nothing.

Its a horrible alternative. If it wasnt for the unions to start with Chrysler wouldnt be in such a bad spot. SO now the govt is forcing the investors to take a loss and further empowering the destructive union?

I dont know if you have ever worked for a union shop before, but from my experience the only people that benefit from the unions are the actual union leadership. The individual workers get little to no benefit.

[eraser4g63]

Its not too bad of alternative to Chrysler folding and investors getting nothing.

No, they could have gone under like every other god damn company that has used bad business practices. Its what they deserve, and I am sorry that ALL those poor people who were part of the union that ran that company into the ground would be out of work. The unions are no better than the people who ran Enron.

[preferredduck]

You might want to recheck your facts. The investors are also getting royally screwed and the only winners in this deal is the union leadership. The unions owned 10% of the bonds sold by Chrysler, yet under the govt forced bankruptcy they are getting a 55% share. The individual and institutional investors are receiving $.30 on the dollar for their investment.


Dont worry about facts though, they are just meaningless drivel anyways.

ohh i had read something on that, whats the name cerebrus or something like that. the web of that "investment" company also has ties to
GM. Tax payers lose BIG $ here on a non publicly traded company that asked for billions. the unions and retirement did kill them somewhat but i hate to say it the investors were greedy and stupid on how they ran things. they have already made their $ and will continue to do so under GM and the cerebrus share(or whatever the hell it's spelled). they might lose a little on the bankruptcy but trust me they won't miss a dime of it. sadly i saw this coming from them in the beginning. privately traded/owned company that sold no stock, crappy cars, bad management, unions. i do feel sorry for the workers and taxpayers here NOT THE ALREADY RICH INVESTORS.

[preferredduck]

http://www.time.com/time/business/ar...868815,00.html

Cerberus LLC is their name and the link will show you what other cookie jars they have their hands in.

Cerberus LLC, the once powerful private equity firm, swept into Detroit in the autumn of 2006 to acquire a 51% stake in GMAC, General Motors' financial arm, and less than a year later it drove off with Chrysler, described at the time as the "capstone" of Cerberus' industrial empire. Never mind that the seller, Daimler, was only too happy to get rid of the auto company.




Today, Cerberus is backing out of those arrangements, ceding some control of its Detroit institutions in return for rich infusions of government aid. The first infusion came on December 19th when President Bush announced that Chrysler, along with GM, would receive $13.4 billion of emergency loans from the Troubled Asset Relief Program (TARP) after Congress had refused to pass a separate bailout bill. On Christmas Eve Cerberus got another last-minute gift when the Federal Reserve Board voted to permit GMAC to change its status to a bank holding company. (GM still owns 49% of GMAC). (See pictures of the remains of Detroit)

As part of the Federal Reserve deal, both GM and Cerberus will reduce their stakes in GMAC, a company decimated by the crisis in residential loans. Although created originally to finance GM's car sales, GMAC also got into residential mortgages, including the subprime variety. Result: GMAC has lost $8 billion over the past two years. Cerberus will distribute shares to its investors, thereby reducing its voting stake to 14.9% and its overall equity stake to 33%. GM will transfer some of its shares to a trust, which will sell off the stock over the next three years.


go read the full article

[preferredduck]

Its a horrible alternative. If it wasnt for the unions to start with Chrysler wouldnt be in such a bad spot. SO now the govt is forcing the investors to take a loss and further empowering the destructive union?

I dont know if you have ever worked for a union shop before, but from my experience the only people that benefit from the unions are the actual union leadership. The individual workers get little to no benefit.

i agree with you here, my brother is a machinist and had a good job at maxwell hous in jacksonville and the union screwed him out of his job even though at first they wanted him in it. it's a long story but im with you on the unions, they need to give a little so places can stay open.

look for chrysler to reassemble in south america somewhere, i'll bet the house on it.

[preferredduck]

^^ too true.

Also $.30 is rounding up lol.

Cerberus LLC

research this company and see what they own, they got themselves into this mess and the taxpayer foots the bill for them and the unions.

[hondachik]

Maybe Chrysler should merge with Honda.

[MistaCee]

Maybe Chrysler should merge with Honda.

No.

[hondachik]

Dammit. Atleast I tried my bailout solution.

[preferredduck]

No.

AGREED, though toyota produced it's first loss in a quarter. so even other car makers are feeling the pinch.

[XanRules]

Its a horrible alternative. If it wasnt for the unions to start with Chrysler wouldnt be in such a bad spot. SO now the govt is forcing the investors to take a loss and further empowering the destructive union?

[BanginJimmy]

What do you find so funny? If you dont think the unions are one of the main culprits in dragging down the Big 3, why dont you tell us what is. Dont say executive compensation either. That costs less on a yearly basis than the quarterly losses amount to.

[XanRules]

What do you find so funny? If you dont think the unions are one of the main culprits in dragging down the Big 3, why dont you tell us what is. Dont say executive compensation either. That costs less on a yearly basis than the quarterly losses amount to.

To say it's the sole fault of the unions is completely absurd.
Incompetent executives like Bob Nardelli, as well as years or poor quality ugly cars killed the Big 3, Chrysler in particular. Also, as the market shifted toward smaller, more fuel-efficient cars, many of the Domestic automakers just kept pumping out bigger, heavier, uglier, trucks. It was bad business above anything else.

[preferredduck]

To say it's the sole fault of the unions is completely absurd.
Incompetent executives like Bob Nardelli, as well as years or poor quality ugly cars killed the Big 3, Chrysler in particular. Also, as the market shifted toward smaller, more fuel-efficient cars, many of the Domestic automakers just kept pumping out bigger, heavier, uglier, trucks. It was bad business above anything else.

they failed with mercedes and everyone else. notice how chrysler/mercedes looked the same for a while. i feel the taxpayers shouls get their money back, we should not pay for bad management. period.

[Ran]

1.) Give Chrysler Big Bailout Loan
2.) Make Obama CEO of Chrysler
3.) Don't Pay Loans Back
4.) PROFIT!

Why not? He's already CEO of GM.

[preferredduck]

1.) Give Chrysler Big Bailout Loan
2.) Make Obama CEO of Chrysler
3.) Don't Pay Loans Back
4.) PROFIT!

Why not? He's already CEO of GM.

you have a point. thius is a doh, i told you so moment. we the people were robbed.