Fiat-Chrysler Off on the Wrong Foot

[spidernut]

I read this in the news recently and couldn't believe it. This really provides a great argument for Fiat waiting for Chrysler to fold, then buying up their assets:

"In a memo to employees Friday, Nardelli said that Fiat and President Barack Obama's administration -- not Chrysler -- would select leadership of a new Chrysler. That includes a new board of directors, which will in turn chose a new chairman and CEO with Fiat's concurrence."

The Government has no business in electing, selecting or appointing leadership in a private company. Lending money does not entitle any agency including the government to take over running the company unless the lender has seized all company assets due to default on the loan...and it hasn't!

If this isn't government overstepping its boundaries, I'm not sure what is. Where's the outrage in our country?

[So Cal Mark]

Chrys went to the US Govt and asked for money. Any lender wants to protect his investment. If Chrys didn't like the terms they could have said no and gone for a payday advance loan. As a taxpayer, if my money is used to bailout Chrys, I want some control over the idiots that have run the company into the ground, over and over and keep turning to the Govt for help.

[wengr]

Chrys went to the US Govt and asked for money. Any lender wants to protect his investment. If Chrys didn't like the terms they could have said no and gone for a payday advance loan. As a taxpayer, if my money is used to bailout Chrys, I want some control over the idiots that have run the company into the ground, over and over and keep turning to the Govt for help.

yes, terms and conditions are built into the front end of loan agreements all the time. What would be more outrageous would be to fund more of the same failed business plan. Obama has however made a huge blunder by announcing that chrysler has 30 days to reach a deal with Fiat. this removes any leverage that Chrysler may have had in negotiation. If you can not sell cars for a profit in your home market then something is terribly wrong. I for believe it's well past the time to let them fail and restructure in a more viable way. Two domestic companys with a limited range of quality made good designs, managed more like the forign owned competition would thrive here.

[Gunsmith]

I am not sure all the strings were reveled when the loan was offered. Additionally Americans should be absolutely outraged at our Federal Government dictating salary caps or anything of the sort in any corporation, that is the job of the board of directors and stock holders. I also don't believe that any money should just be handed over to these companies to waste again with out a plan. So the financial geniuses in these corporations and in the government didn't see this coming? Why aren't those in charge of these agencies out on their ear as well?

Let's try this,
Give every tax paying legal citizen a voucher to spend on vehicles and bank stocks or the like and let the citizens decide who they want to bail out with their money. Right now we get to bail everyone out and get nothing for it but the debtors prison for our kids. I believe the Fed's should only back the retirement plans for those that earned it and let the chips fall were they may for the rest of it. Giving huge corporations short deadlines to solve enormous issues just seals their fate.

It is a shame that so many are so willing to let socialism take over after so many have sacrificed, fought and died to preserve our freedom and capitalism.

Ok I will get off of my little soap box now.

[TulsaSpider]

Well I don't understand why the execs who make millions to sit in a freaking office, running their companies (pick your type of company) into the ground get so richly rewarded. Spending hundreds of thousands of dollars on parties, trips, bonuses and jet planes and such, it's just out of control. Every Empire the world has ever known has failed. Why? Because the division between the wealthy and the poor grew too great. I work 1 FT and 2 PT jobs, I can barely make my rent, never mind health or dental insurance, or being able to take my kids to a movie, or the Zoo or anything. Another thing I don't get is how many vehicles are there anyway? I'll bet there are 4 or 5 vehicles in this country for every person who drives. Many of these vehicles are such fancy Suv's and such that they cost more than the last house I lived in. And we wonder why most of the world dislikes Americans, well this is just one of many reasons excess excess excess. I just heard on the news that most CC companies are so desperate for money they have raised their basic rates to 10% APR as a minimum, jeesh that will help...
Ok off my soap box! LOL!

[racydave]

Our community has seen it to be so important for new sports arenas that we now have the highest hotel tax in the nation. I can't afford the game tickets, but get to pay extra restraunt taxes daily. No, they did not lie about the costs, they were just incorrect...

[spidernut]

Obama has however made a huge blunder by announcing that chrysler has 30 days to reach a deal with Fiat. this removes any leverage that Chrysler may have had in negotiation.

And this is why the Government should never run a car company! The government is a regulatory agency, not a manufacturer. The government has bankrupted Social Security despite mandatory mega-taxes on every working citizen. Any of you care to talk about your self-employment taxes or non-employer subsidized Social Security withholding? The government deregulated banks to the point of corruption, now they're gobbling them up and Federalizing them (search for Barney Frank regarding and the conversion of govt-owned preferred stock to common stock if you doubt it). Fannie Mae and Freddie Mac are psudo government agencies - bailed out due to mismanagment. You get the point.

As a Federal employee, I've seen how the government manages money daily - $100,000 for three planters that had to be torn out, $500 hammer, $200 toilet seat, and paperwork out the whazoo. The government only understands one kind of leverage - that is political leverage. They're not in the business of making money, nor do they truly understand the workings of business.

On Sunday, I heard a "top Democrat" state that if you tax the rich business owners at a higher rate, it will grow the economy. Huh? Ask any business owner or CEO, if you increase taxes, they'll raise prices, cut costs, restructure, or do whatever it takes to maintain the lifestyle that they've worked to attain. The only one who suffers are the working stiffs like us. You can't tax your way into prosperity!

Gheez, I got on a soap box too. I'm getting down. Gheez this gets me worked up.

[mdrburchette]

Fiat should just wait until Chrysler goes belly up, then buy what it needs. That's a terrible way of even thinking but I would run away if I were Fiat.
As far as the economy, big government and our taxes, I'm afraid this is just the tip of the iceburg. We should all be concerned about which way this is all going.

[mbouse]

Denise,

i think that sounds like a good economic decision, but i am sure Fiat hears what we hear as well. fix it again tony

they know they left a bad taste in the mouths of many here in the USA. could they actually make a go of it w/out the local brand alongside?

[mdrburchette]

I don't know, Mike, but Marchionne has proven to be a pretty shrewd businessman. I don't believe he can work his magic with the government and car czars hanging over him.

[speedracer]

On a related note, the Swedish govt. has said no to bailing out Saab. The company doesn't seem to have any mergers planned for the future, so I'm guessing we could see this once proud company go under soon to.

[mdrburchette]

More news on the Chrysler/Fiat front:
http://www.nytimes.com/2009/04/24/busin ... odayspaper

[Michael N. Marcus]

The Feds may be issuing orders to Chrysler now, but they've also done it to Fiat.

Around 30 years ago Washington forced Fiat to buy back my beautiful, fun-to-drive, piece-of-crap 124 Sport Coupe because it seemed like the engine would fall out.

Since then I've bought three more Fiats and six Chryslers. I also had a Mustang with a cylinder head allegedly made by Fiat.