Wednesday, January 21, 2009

Something for nothing and our Chryslers for free.

Among the amazing headlines of praise and ongoing rhetoric this morning I stumbled across one that brought to light Fiat's (Italy's premier manufacturer and owner of Ferrari and Maserati) interest in our very own secretly bankrupt Chrysler.

While I am not surprised that an industrial conglomerate like Fiat might be interested in coming back to the US after almost 3 decades, it disappoints me a little to read that they are only interested if we fork over another $3B in loans to Chrysler (we already loaned them $4B, and an additional $1.5B to its recently approved Chrysler Financial.)

Apparently, Fiat believes a 35% equity stake is fair compensation in exchange for engine technology and car designs (these would not be approved for several years because they have not passed safety standards.) Additionally, they should be entitled to purchase another 20% stake in the joint venture for the outstanding sum of $25M (this assuming the operational efficiency of this company has improved and met the goals established by a Congress who can't tell the difference between a hybrid and a diesel engine) within 12 months.

Okay, I must apologize right now for what is about to follow because my blood is starting to boil and co-workers have started removing items from my desk which normally preceeds my smashing either a telephone, a keyboard or anything I might be able to pick up and express my frustration with!

Seriously? I mean we are one day into an administration that has clearly told us we need to grow up and "approach issues with maturity, creativity, tolerance, and loyalty." Let me start with the fact that we have not begun with much maturity yet, but our demanding a course of action within the next four weeks is clearly a start.

As far as creativity, it's true we have not demanded much of this either, and that is obvious because the same old matriarchs (ie. corporate executives) are still at these companies. This too I am sure will be addressed in short order.

Tolerance! Well, the fact that we have not addressed the previous two points and we are still at the table looking to solve the problem I think answers the question of tolerance.

Now, finally in terms of loyalty, it is unequivocally preposterous to even attempt to bring our intentions into doubt! Are you kidding, we are $5.5B into Chrysler and looking to dish out an additional $3B. No one, and I mean no one on the face of this great earth can possibly debate us on where our loyalty lies!

We care about three things here: First is the thousands of workers that are about to be displaced. Second is the intellectual capital industries of this type on our soil forces us to possess. And lastly we are terribly concerned about the crisis of confidence a dramatic collapse of an industry this size would mean not only for our moral but also for the integrity of global trade and processes.

Additionally, does anyone really believe that after pumping $5.5B into Chrysler we are not going to fork over another $4B? Furthermore, you think we are ready to walk away from $8.5B and let this company collapse? The answer is obviously, NO! That said, should we allow Fiat so assume 35% of an entity that is fully bank rolled for the immediate future in exchange for cars that will not be approved for several years and engine technology that does not wain us off oil base fuels? The answer to this is also as dramatic, NO!

Should we allow Fiat to purchase an additional 20% stake in this new entity which we bank rolled with $8.5B initially (and I say this because we will probably need more...) after 12 months of aggressive restructuring for $25M? Are you kidding me? Do we all look unequivocally stupid to you? Let me get this straight, we bank roll it. We force restructuring. We retool it. We give you access to one of the best distribution channels in the country. We hand you the keys to some of the best selling autos and manufacturing in the country. We give you 12 months of leniency, and we do this all for a final 45% stake and $25M in cash. Right, I can see the pigs flying past the window on the tenth floor of this dramatically overpriced midtown office I inhabit.

In closing, allow me to quote our now fearless leader President Obama: "In reaffirming the our greatness of our nation, we understand that greatness is never given. It must be earned." Please, I implore you all to tread lightly. The solutions we come up with to our current problems come loaded with the possibility of stripping us of the fruits of our hard work, dedication and hard earned tax dollars.

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