Chrysler Bankrupt, News Broken by Obama

As I talked about last night, it is amazing to me how interwoven Obama is with the operation and running of Chrysler. This is not the pres turning to a titan of industry and telling him to save the company, this is the pres trying to be a direct part of the leadership of private companies.

Ok, all that said, here is the autoblog breakdown of what happened today for Chrysler, with my commentary.

• Blame it on the creditors – President Obama cited Chrysler's creditors' refusal to accept a debt-for-equity swap as the main reason filing for Chapter 11 was the only option left. (Yes - but the deal was terrible for creditors, and would have royally screwed them. The UAW had to give up some benefits, the creditors would have to have given up over 90% of their debt - I think that was the number).
• Chrysler divided – 55% will be owned by the Voluntary Employee Beneficiary Association (VEBA), 10% shared proportionally between U.S. and Canadian governments, 20% owned by Fiat. (Again, true... but... the VEBA is controlled by the UAW - which means that the UAW will be the new owner of Chrysler. As the VEBA is a pension plan, it wont have any kind of voting control, but still, the pension owns the company: ironic.)
  
• Fiat's got goals – Remaining 15% of company will be distributed to Fiat in three 5% increments for meeting the following goals: creating U.S.-built 40-mpg vehicle platform, providing a U.S.-built fuel-efficient engine family and giving Chrysler access to global distribution network. (Honstly, WTF. The economy is going to shit, the company is going bankrupt, and the administration puts in ownership limitations based on "green" car building? What kind of crazy ass time do we live in? Why not make a requirement about performance, and then Chrysler would have to build cars that sell? Autocratic insanity.)
  
• Nardelli nixed – Current Chrysler CEO Robert Nardelli will leave after the alliance with Fiat is completed and the company emerges from bankruptcy, though he has stated that he was not asked to leave. (Run man, run)
  
• GMAC gets the job – Chrysler Financial has been replaced by GMAC as Chrysler's preferred lender for wholesale and retail transactions. (This is part of the "screw Cerberus" govt. plan, and has no other logical basis.)
  
• In-and-Out – Chrysler and the U.S. Auto Task Force estimate the company will emerge from bankruptcy in 30 to 60 days.
  
• Dealerships to be cut -- No surprise, but Chrysler's dealer network will be cut down as part of the restructuring. No hard numbers are available yet, but expect details to follow in the next 24 hours. (Buy your 300c's and Chargers while the getting is good)
  
• Business as usual – Chrysler will largely run as normal in the interim, being funded by government-backed debtor-in-possession financing; warranties will be honored, suppliers paid and dealers supplied with inventory, but no new vehicles will be built until bankruptcy terms are finalized. (None need to be built - there is a huge backlog of vehicles sitting on lots. They are likely going to be skipping the 2010 model year on some models).

So there it is, the new vision of a UAW owned, politician lead Chrysler.

If anyone actually, honestly, thinks this means they will start building better cars they are out of their mind. The only thing that might save it is the pinnacle of capitalism, the Italian company Fiat.

A sad day.