Even the most positive, true-believer spin about the Obama administration's politicized, taxpayer-funded Chrysler bailout comes to a crashing halt when Europe's fiscal crisis and Fiat's home-market woes in Italy are factored in. Now, the question is how long Chrysler's profits — up 80 percent in the third quarter — can prop up Fiat.
Its credit rating below “junk” status, its 63,000-worker payroll at home protected by Italian labor law and its European sales lagging along with Europe's economy, Fiat faces “labor and productivity issues worse than those that drove Chrysler to near-liquidation,” John Berlau of the Competitive Enterprise Institute and Mark Beatty of Case Western Reserve University write for The Daily Caller.
They say the administration gave Chrysler away to Fiat, which exchanged only some intellectual property — no cash — for its initial 20-percent stake. And while Fiat has since paid $2.2 billion to hold 58.5 percent of Chrysler, U.S. taxpayers have contributed $12 billion-plus.
The administration's “managed” bailout gave pension funds and other secured creditors smaller stakes in the new Chrysler than normal bankruptcy proceedings would have. And Fiat's woes mean little, if any, Fiat investment in or new U.S. jobs at cash-cow Chrysler — and existing U.S. workers “are now hostages to the woes of Fiat and the Italian economy.”
The Chrysler bailout is another failed government attempt to pick an economic winner — at the expense of U.S. taxpayers, workers and creditors.
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.