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Unions prevail over Wall street in Chrysler deal.

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Kdillard Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-02-09 07:38 AM
Original message
Unions prevail over Wall street in Chrysler deal.
Edited on Sat May-02-09 07:54 AM by Kdillard
http://online.barrons.com/article/SB124122579378179443....



PRESIDENT BARACK OBAMA BLAMED CHRYSLER'S BANKRUPTCY on "speculators," but

the real problem was that the government's plan gave too much to the auto maker's unions and not enough to creditors.

If the secured creditors holding $6.9 billion in claims had been offered anything close to what the administration wants to give the United Auto Workers, there would have been no bankruptcy filing by Chrysler.

In the bizarre pecking order offered by the administration, the unions, which are at the bottom of Chrysler's capital structure, would get nearly full recovery value for their $10.6 billion retiree health-care claims, while the secured...




Unions take rare front seat in Chrysler deal.


http://www.nytimes.com/2009/05/02/business/02bankrupt.h...

Labor unions usually dread bankruptcy, and for good reason. Their pay, benefits and pensions typically suffer significant cuts, as airline and steel workers can attest.


But for the United Automobile Workers union, Chryslers Chapter 11 case, which began in New York on Friday, could turn out to be if the company survives and thrives the Cadillac of bankruptcies.

The U.A.W., for example, has received upfront protection from the Treasury Department for its pension plan and the fund that will take over responsibility for retiree medical benefits.




Unbelievable so to hell with the retirees and their Healthcare.
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HopeOverFear Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-02-09 11:12 AM
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1. Wonderful news
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Abq_Sarah Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-02-09 11:24 AM
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2. Secured creditors have rights
That need to be respected. They aren't the ones who ran the company into the ground, they are the ones who provided the cash needed to keep the company running and they shouldn't be punished.
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Kdillard Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-02-09 11:36 AM
Response to Reply #2
3. I thought this was an interesting article addressing some of your concerns.
Edited on Sat May-02-09 11:44 AM by Kdillard
http://www.nytimes.com/2009/05/02/business/02norris.htm...


Why bondholders should stop whining.

The fact is everyone is making concessions especially the Unions. The real question is why should the bond holders not have to make concessions? and would the offer by the government by any better than what they would get elsewhere and the answer is most likely not.
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