Yep, roll the dice on a private equity stake gamble and -poof!- the Fed closes the table.

Roll the dice on GSEs and Wall Street fiduciary instruments that are tacitly (but not explicitly!) backed by The Fed and, well, you get billions to be made whole.

It's now becoming very clear who gets their arses saved and who doesn't. ObamaCo has endless money for donors, pet projects, municipalities, wall street, etc. but be one of the countries' oldest most respected engineering and manufacturing companies in flyover country and it's off to the abyss.

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Well, to be fair, this is a story about how Cerberus is getting the axe, not Chrysler.

That said, I am also mystified as to why Wall Street just basically gets billions with very little oversight, while the car companies get grilled and every minutia of their recovery plans inspected. (and to be clear, I support this grilling, I just don't know why the a**hats who engineered this mess aren't getting hammered twice as hard.)

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This is a smart move because this firm is a "buy 'em and strip 'em" company as attested by their selling off the Mervyn's department store chain. They now control GMAC and turned it into a bank to qualify for bailout funding out of the gate. Cerberus doesn't care about producing automobiles...just investment moves.

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The government is doing no such thing. The government is simply offering Chrysler a deal. If Chrysler agrees to the deal, then the federal government will give them a few more $B.

Chrysler can certainly decline the government's offer. Of course, if they do that, then the federal government won't give them billions of dollars, and Chrysler will be in Chapter 7 within a few months (which is where they are likely heading regardless).

If you want to borrow money, then you have to accept the lender's terms. If you don't want to accept the lender's terms, then you won't get the money. It is a simple as that.

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"If you want to borrow money, then you have to accept the lender's terms. If you don't want to accept the lender's terms, then you won't get the money. It is a simple as that."

You could have just said loan shark

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"Chrysler is 100% dead, the only one that can try to resuscitate it is the govt. Would shutting it down and laying off the tens of thousands of workers be a better way, you so-called patriot?"

YES!! Because that is what needs to happen. If Chrysler is 100% dead- ie they are not profitable and can never be- they need to go bankrupt. The economy will sort out what happens to everything- including the workers.

By letting the government get involved- they are only prolonging the inevitable pain, and in fact making it worse.

It sucks for those workers, but that is what needs to happen. Unprofitable companies should not be kept going, because that money could be better spent elsewhere.

And all of that is ignoring the obvious violations of the Constitution of having the government being involved in the first place.

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"You could have just said loan shark."

Mike, the same is true for at a bank. If you want to get a mortgage, then you have to agree to a bunch of their conditions, including: escrow of the real estate tax and insurance, survey of the property, title insurance, etc. You can refuse doing all of those things, but then you don't get the loan.

Cerberus has been desperately trying to find a buyer for Chrysler for at least six months. Nissan-Renault turned them down. GM turned them down. Their original draft agreement with Fiat basically gave the majority of the company to Fiat, without Fiat accepting any of the liability. It is perfectly within the rights of the lender (the federal government) to say that agreement isn't good enough -- that the Feds have to get paid back in full before Fiat gets any equity.

It is also fully within the rights of the lender (the Feds) to require that Chrysler have a plan that has a chance of paying back the loan. Chrysler has no chance of doing so if it remains on its own; that is why Cerberus has been desperately trying to sell Chrysler to anyone.

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Matt B,

"obvious violations of the Constitution of having the government being involved in the first place."


Could you illuminate for me what these obvious violations of the Constitution are?

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@BVZ, how can you not see it?

The US Constitution is the definition and restriction of government. The doctrine of enumerated powers says that anything that the Constitution doesn't say, are left to the states, and more importantly, to the people.

Where in Article 1: Executive branch, or Article 2: Legislative branch, or any other part of the constitution, does it say that the government has the enumerated power to lend money to anyone, pay anyone for private enterprise operations, or manage anyone's legal business affairs?

Stealing from Peter Taxpayer to pay Paul Businessman is not moral, ethical, or allowed under the constitution.

Firing Paul Businessman is not either. Nor is restricting his freedom to be paid for his enterprise, especially under a legally standing contract that broke no law. Ex Post Facto taxation, regulation or prosecution after the fact is illegal for the government to do. Targeting individuals with tax laws or punitive regulations that don't apply to everyone is also illegal, not to mention taxing people out of their annual wages, which were in the form of bonuses, some of their salaries were $1, the rest being bonus money, under legal contract.

Good grief, what is the government currently doing WITHIN the confines of the Enumerated Powers?

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Well they're not starting any new wars under false pretenses and getting hundreds of thousands killed. Oh snap!

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Dave, if you're going to contribute to this car discussion, then fine. If it's going to become a rush inspired political rant, then go to a politics site. We don't need this here, this is Autoblog.

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Rush inspired? So when the president unilaterally tells a company that they no longer own what a few seconds ago they actually owned, you are fine with that. You are okay with an elected official taking property without compensation. That, comrade, is one of two things: a dictatorship or communism. In your world then, anything that is not pro-dictator or pro-communist is somehow "rush inspired." What a screwed up world we live in.

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Another session of finger pointing and 'stalinism' (lol) accusation. Chrysler is dead, the only way for it to somehow survive is by the government putting it back on track.

But of course you 'free market' fanatics prefer to let it die than to give the 10s of thousands of jobs a chance of survival. And you call yourself patriotic? Shame on you.

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Ian B.: "Dave, if you're going to contribute to this car discussion, then fine. If it's going to become a rush inspired political rant, then go to a politics site. We don't need this here, this is Autoblog."

Hey Ian, you might have missed it but many previously private sector enterprises - or actually, whole private sectors - used to be just that, private.

Now, they're run/gangstered/extorted/"managed" by the government. Unfortunately, they brought their politics with them (I don't see any non-doner or non-union sectors getting bailouts).

So, going forward, this is a Blog about Autos which are mostly (US anyway) now run by the government. It was fair and within bounds to comment/criticize the private stweardship, it is still fair and within bounds to comment/criticize the public stewardship.

Or, are you saying we lost that too?

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@Goat Law

Excuse me. But what part of the whole Chrysler thing don't you understand? Its not like a communist govt that comes in and says to a highly profitable company and their owners that they don't own it anymore. Let them own the company for a few more weeks without federal aid and they are dead. And THEN they wont own anything anymore.

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Rob... You misspelled your name... think you meant R-U-S-H. Popping the prescription pills again I see.

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