Taking the newest Chrysler for a spin on the Autostrade

June 13th, 2009 at 04:00pm Annette LaCross

If anything embodies the old saw, “Where there’s a will, there’s a way,” it has to be the new Chrysler Group LLC.

Although we could modify it, in this case, to “When the most powerful man on the planet wants something to happen, he tends to get his calls returned.” It’s not as catchy, maybe, but no less true.

I wasn’t particularly surprised, then, when the company’s bankruptcy proceedings seemed to occur exactly as President Barack Obama predicted weeks ago. The bankruptcy court judge seemed to know just how to rule on the various issues.

Indeed, the only blip came when U.S. Supreme Court Justice Ruth Bader Ginsburg ordered a stay on the judge’s decision to allow the sale of Chrysler’s assets to Fiat SpA, to decide whether it would hear the objections of a trio of pension funds.

It must have been the quickest Supreme Court decision in decades — it took a mere 24 hours before it decided to not take the case.

As I said: When the most powerful man on the planet wants to get things done in a hurry, things tend to get done in a hurry. And not surprisingly, those things tend to go his way.

At issue for the pension funds is the makeup of the New Chrysler. The United Auto Workers retiree health-care trust got a 55 percent equity stake and $4.5 billion note for its $10.5 billion unsecured claim, while Fiat stands to get an initial 20 percent stake.

That leaves the secured lenders holding the rest, the equivalent of about 30 cents on the dollar.

The major lenders, including JPMorgan Chase, Citigroup, Morgan Stanley and Goldman Sachs, backed off fairly early in the process. Then again, they are all recipients of billions of dollars from Obama’s inherited Troubled Asset Relief Program.

The smaller creditors, those in which the government doesn’t have a controlling stake, were holding out for 60 cents on the dollar.

If their objections came to nothing — the Supreme Court’s refusal means Fiat will collect Chrysler’s assets — I at least got a chuckle over Obama’s indignation as he triumphantly declared that Chrysler was bankrupt.

He vilified those pesky teacher and construction worker pension funds, all but calling them unpatriotic.

What sort of patriotism were they lacking, I wondered, those American teachers from the heartland — as if giving an otherwise worthless company to an Italian automaker somehow calls for a tearful rendition of “The Star-Spangled Banner.”

Then again, I’m probably looking at it the wrong way. Maybe I should have whipped myself into a frenzy of national pride the first time, when a German company took over.

Contact Business Editor Annette LaCross at alacross@rrstar.com or 815-987-1295.

Entry Filed under: fiat, chrysler, auto industry