Friday, December 12, 2008

The Bailout

The Bailout

Some conservatives are beginning to refer to the bailout of the Big Three as "the UAW bailout." They are making a good point with this--but as stock market journalist Jim Cramer (not a relative, to my knowledge) points out:
Let's stop the pussyfooting. Chrysler has to go. We have to take out capacity. The people who own Chrysler knew what they were getting into. They were the most sophisticated of investors: Cerberus. Every time CEO Bob Nardelli came on TV before now, he told us Chrysler was doing great. He says he is willing to sacrifice the upside and give it to the government. I say, terrific, but you know what? I offer Cerberus the upside and the downside, but no money. If we care about the workers, wipe out the investors, cancel their debt and sell it all to Ford (F Quote - Cramer on F - Stock Picks), which seems to have a clue and is not desperate.

On a somewhat related point, here's one more reason the government should let Chrysler fend for itself as it bails out the other two members of the big three: Daimler – that's Mercedes Benz – still owns close to 20% of Chrysler. So we'd not just be bailing out Cerberus, a big fat private equity fund, we'd also be bailing out a foreign automaker. A little disgraceful, don't you think?

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