There’s an article over at the Wall Street Journal about the vultures circling over the carcass of poor Chrysler:
A group of big banks and other lenders rebuffed a Treasury Department request that they slash 85% of Chrysler LLC’s secured debt, proposing instead to eliminate about 35% in exchange for a minority stake in the restructured car maker and a seat on its board.
The lenders’ counteroffer marks a significant act of brinksmanship as the banks and the Obama administration’s auto task force duel over concessions to avoid liquidating the country’s third-largest car company.
I’m not quite certain how to interpret what the article is reporting about the various alternatives that are being offered. As best as I can tell the banks are arguing that everybody but Chrysler’s creditors should take a hit and that Fiat shouldn’t get a windfall out of buying Chrysler’s decaying remains and that the government is arguing that everybody but the UAW members should take a substantial hit and if that means that Fiat gets a big windfall it’s jake with them. Is that an unfair characterization? Is there anybody out there with more detailed knowledge of the proposals and counter-proposals who can connect the dots for me?
I can certainly understand the bondholders looking out for the bondholders, the stockholders looking out for the stockholders, and the stakeholders looking out for themselves. Nobody seeks to be looking out for the interests of the taxpayers in any but the most indirect of ways.
The apparent failure of any of the parties to look out for the interests of taxpayers in all of this may provide some explanation for the Tea Party demonstrations that are being seen around the country. I remain skeptical of these demonstrations (I honestly think they’re a little nihilistic) but I can certainly understand them.
