Why is Chrysler sitting at the free money trough with Ford and GM?

Ford and GM are publicly traded companies and their stock is subject to impact average Americans and their retirement plans. I don't agree with a bail out, but I see why they are at the table begging. I can't believe no Senator or Representative in either of these trips to Washington asked Chrysler why they were there also. They are a private firm held by a private company that has plenty of money. If they need money shouldn't they just ask the parent company for it? Are we really going to give a few billion dollars to a hand full of guys that already have a few billion dollars in the bank?Why is Chrysler sitting at the free money trough with Ford and GM?From the Wall Street Journal:

Lawmakers last week questioned Chrysler Chief Executive Robert Nardelli on Cerberus's commitment to the company. In one exchange with Mr. Nardelli, Sen. Robert Corker (R., Tenn.) criticized the firm. "Cerberus has cash, lots of cash, that it is unwilling to put into this company," Sen. Corker said.

I'm not sure if Senator Corker was the only one to actually ask the question (I was at work, and am relying on media reports), but plenty of others are objecting to Chrysler getting money. In fact, it's bipartisan opposition:

If the Senate fails to pass a measure to aid the industry, the House will not act.

That would be fine with Rep. Steve Kagen, D-Appleton. He opposes providing money to Chrysler, which is owned by Cerberus Capital Management LP.

Admittedly, Rep. Kagen's opposition sounds personal: Another of Cerberus' companies closed paper mills in his district, but refuses to sell the facilities to investors who want to have a go at running them. But he's urged other Members of Congress not to give Chrysler any money at all.

It looks like there are Congresscritters who support giving GM and Ford help that object to giving Chrysler help. Whether they're enough to change the outcome remains to be seen.Why is Chrysler sitting at the free money trough with Ford and GM?
They were asked why they were there. They were told that the parent company needed to foot the bill- so the private owners sold the company. That sale was one reason that Chrysler received "bail out money".

Ford did not get any "free money", the Ford Family did not want to loose control of the preferred stock bailed out the company with family money (along with other resources).

China has driven the price of GM stock up, and if you read the money market reports this may be a prelude to a worse world economy. China bought up Volvo and several other companies GM, and Ford ditched in reorganization.

So you missed a lot of details in the news summaries.Why is Chrysler sitting at the free money trough with Ford and GM?Chyrsler is about 80% owned by the UAW, United Auto Workers, so I imagine the retirement/pension issue is handled.



Fiat owns bout 20% and does the management.
Because they can, and because we've given millions to foreign companies that don't need it so they can create jobs/compete against domestic companies. Chrysler has been working hard at improving, but they face the same un-level playing field as Ford and GM. This article was really insightful on how those companies have attempted to reduce costs while still providing healthcare to their employees, several years before asking for financial help. I feel sorry for our companies, because they're sued and penalized by juries, even after complying with every federal safety regulation, or, in the case of Chrysler, they're ordered by the NHTSA to recall gas pedal assemblies despite the fact that there hasn't been a single complaint of uncontrolled acceleration. Think about that. Imagine if you made a product, and not only was nobody injured, but nobody even complained of a problem, and you were forced to issue a recall on a part that had no problems! Only in America!Why is Chrysler sitting at the free money trough with Ford and GM?Yeah, the big 3 have the govt buffaloed.

All 3 are cash strapped. Chrysler is a fairly new company that is privately held and does not have the backing of a huge number of stockholders. Daimler still holds 20% of Chrysler, but Daimler is not interested in putting any more money into the company. Chrysler's intent is to eventually buy out Daimler.

But Ford and GM need Chrysler to keep out of monopolistic charges. For example, if there were only 2, and one of them did not offer a specific product, the other company could claim monopolistic practices and the lawyers would get rich at our expense. Back in the '60s, GM financed Chrysler's greater warranty program in order to keep Chrysler afloat.

If the car makers were smart, they would crank out a high quality model and private lable it to the other car makers. Like Toyota Matrix does for the Pontiac Vibe. Why should each company produce very similar models? All cars are going to look virtually alike because fuel economy dictates a shape that moves through air efficiently.Why is Chrysler sitting at the free money trough with Ford and GM?
The automobile industry in America is absolutely huge. I can't tell you why the CEOs decided to ask for a bailout, but I can tell you that we've got to do it. There are way too many possible seriously negative outcomes if we don't bail them out. I understand that we're going to have some hefty governmental oversight of their businesses after the money is received. I'm furious at all the wealth some of the car manufacturer CEOs and higher management have socked away. If they had been saving some of that excess money they wouldn't need a bailout. Mis-management for sure, among other things.

Not to mention disgusting that they showed up for their first go-round at asking for a bailout in private company jets. What nerve!
management of these companies without restrictions who screwed up and, in the case of Bank of America, won't give a loan to that company where the employees are picketing. And all of those bonuses and golden parachutes that are being paid to those executives with our money. Who is protesting against that? Not enough people that I can see. But I do believe this feeling against the Big 3 is a backlash.

The loan (not bailout) is being given to the Big 3 so that our last manufacturing base in this country (thanks to the Bush administration) does not go under. Manufacturing cars has always been a tremendous industry in our country, and in WWII the assembly lines converted to war production and helped us win the war. This is a gift to main street, the hourly guy who breaks his back everyday for maybe $28 per hour (not the $72 talked about). If we allow them to go belly up, there are about 3 millions jobs across the U.S. that will go under because they are small businesses that get their income from the auto industry. You are talking of crippling Michigan, Indiana and Ohio. This will tip us over into a real Depression. This is a lot like locking the barn after the horse has run away. You think things are bad now, just let the Big 3 go under.

I admit that the public is disgusted with the previous bailouts, but the emphasis on punsihing the Big 3 for the others, is unfair. The automobile companies are guilty in the past of riding the gravy train, but so was everyone else, the American public for instance. How much have you charged to credit cards? Can you pay your mortgage? Let's get real.

I come from Michigan and know how much the Big 3 supports the Mid-west. My family is still there and things are so bad now with layoffs that there are a rash of home robberies going on now. People are afraid that if the Big 3 goes down, the state will become a welfare state and crime will become rampant.

But, as I said, this loan affects main street, not corporate executives, and we have enough people floudering because of the home failures, let alone adding a 3 million job loss to the burden that Obama will take over in January.

To put things in perspective, Bush just bought a $2 million house in Dallas where he will reside after his presidency. He gets us in two wars, bankrupts the surplus, in debt to China, and leaves us with a near disaster of an economy. Why isn't anyone angry about that?

It's smart business to save the Big 3, and it's a loan people not a bailout.Why is Chrysler sitting at the free money trough with Ford and GM?
The way they ended up with money was to sit around in nice suits and convince other people to let them use their money. It鈥檚 called using other People鈥檚 Money, or OPM. In that business you never leave any cash on the table. Other People鈥檚 Cash. If legislators are dumb enough to stack the thousand dollar bills to the ceiling, no Wall Street type is going to leave a dollar on the table.

And they don鈥檛 have that much money either. You see money is *all* they have. Once that is gone the show is over. No more yachts and cigars. And if you publicly blow all your money on a bad investment, the OP are somewhat reluctant to let you manage any more of their M.