Feds may want loan money back early after learning of Chrysler/Fiat deal
The conference room where Chrysler and Fiat worked out Fiat's 35% stake in the Pentastar probably still smells like hors d'oeuvres and bottled water, and already a Congressman is thinking about making Chrysler return its $4 billion dollar bridge loan.
In fact, Chrysler and Fiat aren't even partners yet. All they have done so far is sign "non-binding term sheet to establish a global strategic alliance." They're engaged, but nowhere near married yet, and it is unclear yet what the final partnership – if there is one – is going to look like. Even so, Representative Barney Frank of Massachusetts has said the pact "might well trigger a repayment" depending on Fiat's ultimate interest in the company.
The government, of course, wants to be repaid the money it gave to Chrysler. Having Fiat arrive with a potential life preserver and a plan that makes sense would appear to be good for everyone, including the government's chances of getting its money back. After all, if you believe all the writing on all the walls, Chrysler is doomed if it doesn't get hitched on the quick, which would make that $4 billion just another chapter in history. So announcing that if Fiat and Chrysler do tie up, the union might start off $4 billion poorer doesn't strike us as smart business, nor smart politics, nor sound financial planning with taxpayer money. We can only hope sense will prevail and Chrysler and Fiat will be given the time and resources they need to put a viable long-term plan together.
[Source: Freep]
Reader Comments (Page 1 of 3)
Mazda FTW! 2:34PM (1/21/2009)
In other news, Citibank got an additional $20 billion, no strings attached, because the exec's BMW leases were coming up due.
Reply
notYou 4:28PM (1/21/2009)
Yep.
What part of "We Own You Now." didn't Chrysler understand when they took the money?
Welcome to "Government Running Businesses Into The Ground, Just Like They Do Everything Else."
Richard 2:35PM (1/21/2009)
Great pciture!
LMAO
Reply
James 2:48PM (1/21/2009)
^
^
^
Barney Frank...the loan shark.
xpolarx 3:53PM (1/21/2009)
http://www.youtube.com/watch?v=_AJ0SkbPxAk
You got 'til five o'clock!
Kimura 2:35PM (1/21/2009)
I despise Barney Frank, and it's one more reason why I hate the state I live in. We have idiots in office.
Reply
caddy-v 4:32PM (1/21/2009)
Then let me ask you a question. How in the hell do morons like Bawney Fwank keep getting re-elected over and over and over again? Him especially, the idiot most responsible for the mortgage mess that led to bank failures that led to the state the auto industry is in today.
Sometimes one has to wonder how it could be that Messachusets is where this nation began the revolution.
jg 5:59PM (1/21/2009)
Barney Frank is responsible for the mortgage mess? Link please. I gotta read this.
IOMTT 8:25PM (1/21/2009)
@ Caddy-V...two words...term limits!
AZZO45b 8:45PM (1/21/2009)
POWER in "D.C.": Bush? Cheney?? Rove??? the Republican controlled congress (until Jan 2007)????
NOPE!!! According to Caddy-V its ONE Democratic senator, Barney Frank. He is the one "lone wolf" who wrestled away the power base in Washington? Orchestrated the mortgage meltdown??... rocked Wall St. ??? PLEASE!!!
Caddy, turn off FOX Noise... its obviously rotting your brain!!!
BoxerFanatic 9:18PM (1/21/2009)
@jg,
Google Barney Frank Fannie Mae... Count the results.
According to, Jeff Poor of the Business & Media Institute
9/24/2008 4:00:57 PM
"Prominent Democrats ran Fannie Mae, the same government-sponsored enterprise (GSE) that donated campaign cash to top Democrats. And one of Fannie Mae’s main defenders in the House – Rep. Barney Frank, D-Mass., a recipient of more than $40,000 in campaign donations from Fannie since 1989 – was once romantically involved with a Fannie Mae executive."
Just months before the bail-out of Fannie and Freddie, Frank, Chris Dodd, and other HR and Senate Banking committee democrats were touting how solvent Fannie and Freddie were.
These people are in it over their heads. Carter and Clinton administrations both pushed affordable housing, as code-words for lending to non-viable debtors. The Congress has taken that and run with it.
US Congress used their patsies, Fannie and Freddie which were designed to be government and business hybrid entities to insert politics into business, to guarantee buyers for securitized bad debt, which via political motivation turned into corporate competition, pushed banks to write bad paper.
And here we find ourselves, reaping the crops that politics have sewn. Corruption clothed in ill-conceived intentions pawned off as good.
The answer never was to extend bad debt to people who coulnd't afford to do anything but default eventually anyway...
The answer is to remove bureaucratic road blocks, and allow people to afford to buy housing the right way.
But Government taking their hands off of something never happens, they keep digging their fingers into more and more and more, trying to solve the problems that they caused in the first place. Corrupt people cannot eradicate corruption.
AZZO45b 10:00PM (1/21/2009)
Geez, boxer, your "red" is showing. $40,000 from Fanny Mae? $40,000 over 20 YEARS... your writer is bustin' Barney Frank's balls for $2,000 a year in campaign donations? Seriously?? That's your convincing evidence???
So, let me get this right... Carter started the double secret, mortgage grand plan, eh? Clinton picked it up again after 12 YEARS of Reagan & Bush 41??. What's your excuse for what happened under Bush 43??? The "Plan" had tricky "balloon" booby-traps triggered under select Republican administrations??? Oh yeah!!!
You typed that fluff out with a straight face???????? OMG!!! :) :) :)
Red 2:37PM (1/21/2009)
I wasn't for the bailout, but this is ridiculous. Let them keep the money under the terms agreed upon.
Reply
jim 3:32PM (1/21/2009)
All Frank said was that the investment by Fiat may trigger the repayment provisions that are part of the bail out's terms and conditions. So yes let's be scrupulous about following the agreement and if that means Chrysler keeps the money fine, if it means that they need to repay it, fine also.
Patrick 2:36PM (1/21/2009)
I don't trust Cerberus and they will probably try to extract every last cent they can out of Chrysler before bankrupting and/or parting out Chrysler.
Reply
BLS 2:38PM (1/21/2009)
All they have to do is promise to give a Chrysler TC by Masarati for everyone who doesn't vote for the money to be repaid.
Reply
howard 2:22AM (1/22/2009)
I have access to a TC By Masarati that belongs to one of my Doctors! I've done the work on it since she bought it new! I finally talked her into puttin it up on blocks and go out and start it every Sunday Morning, let it run in gear for about 30 minutes! She takes it to Dallas on it's birthday and visits two of my sons who live in the Dallas area! She has people wave her down and ask how much she wants for it? I know for a fact she turned down a new Loaded Dodge Hemi Challenger for it from the local dealer!
JB 2:39PM (1/21/2009)
You used "sense" and "Barney Frank" in the same story????
Reply
John 2:40PM (1/21/2009)
I cannot believe that AB has shown such bad taste and judgment in implying that since Fiat is an Italian company that it is run by Mafia types. Sure it was meant as a funny, but it is not funny. Please reconsider.
Reply
Greg 2:53PM (1/21/2009)
Umm... those are supposed to be goons hired by the gov't to get the money back, not a representation of the Fiat execs, Captain.