Is it any surprise that Chrysler and GM are now in the process of going out of business?... Their bankruptcy should perhaps be viewed as a success of the market system.
Greg Mankiw
Showing posts with label Chrysler. Show all posts
Showing posts with label Chrysler. Show all posts
Saturday, May 23, 2009
Tuesday, May 5, 2009
Peter Schiff on Chrysler and the Auto Industry
Chrysler has not been profitable for years; and with Washington calling all the shots, the potential for long-term viability has been dashed.
A real bankruptcy is the only solution. In it, current shareholders get wiped out, current contracts and obligations are voided, and the remaining assets, both physical and intellectual, are sold to the highest bidders. But the process would create the opportunity for new management, with private capital, to buy auto-producing assets for pennies on the dollar, hire skilled auto workers at much lower costs, scrap out-of-date business practices, and produce cars cheaply and profitably. Under the guise of "saving jobs," the Administration has disrupted this process...
Giving control of Chrysler, and soon GM, to the UAW and the government will enshrine a culture of failure and seal Detroit's fate. Both companies will become government-sponsored entities, not too dissimilar from Amtrak or the Post Office, forever relying on taxpayer funds to create products of dubious quality.
read the essay
A real bankruptcy is the only solution. In it, current shareholders get wiped out, current contracts and obligations are voided, and the remaining assets, both physical and intellectual, are sold to the highest bidders. But the process would create the opportunity for new management, with private capital, to buy auto-producing assets for pennies on the dollar, hire skilled auto workers at much lower costs, scrap out-of-date business practices, and produce cars cheaply and profitably. Under the guise of "saving jobs," the Administration has disrupted this process...
Giving control of Chrysler, and soon GM, to the UAW and the government will enshrine a culture of failure and seal Detroit's fate. Both companies will become government-sponsored entities, not too dissimilar from Amtrak or the Post Office, forever relying on taxpayer funds to create products of dubious quality.
read the essay
Monday, May 4, 2009
Thursday, April 30, 2009
Chrysler Files for Bankruptcy
Chrysler LLC filed for bankruptcy Thursday. But a deal has been reached to combine the company with Fiat in order to allow Chrysler to stay in business.
The bankruptcy filing, which was made in federal court in New York, comes after some of Chrysler's smaller lenders refused a Treasury Department demand to reduce the amount of money the troubled automaker owed them.
In remarks at the White House, President Obama said that the bankruptcy filing is not a failure for the company but "one more step on the path to Chrysler's revival."
Obama vowed the bankruptcy process would be quick, efficient and controlled. A senior administration official predicted it would be completed within 30 to 60 days. The combination with Fiat is also due to close during that period of time.
read the CNN article
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