Chrysler to be exchanged (No GM Merger)
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From: Indianapolis, IN
Chrysler to be exchanged (No GM Merger)
Copied verbatim from http://www.allpar.com/news/index.php...-be-exchanged/
According to a new Automotive News article, Cerberus is planning to give away its entire stake in Chrysler - roughly 80% of the company - to labor and creditors.
Bush’s loans require Chrysler to provide half of its obligation to the UAW Employee Beneficiary Association trust with equity. In addition, Cerberus has said it would exchange UAW agreement with severe pay and benefits reductions for equity. Cerberus is also offering equity to creditors in return for lowering of debt.
As a result, Chrysler would be entirely owned by labor, creditors, and Daimler. It appears that the UAW (including the health-care fund) would have the most equity. The move leaves Cerberus with Chrysler Financial, which is likely to be a strong profit-maker when the economy turns around; the private equity firm has already agreed to invest the next $2 billion in Chrysler Financial profits in Chrysler, LLC.
Cerberus also noted that it had not invested more in Chrysler because its charter limits how much it can invest in any one organization.
The move should put aside rumors of merging with General Motors and being purchased by a Chinese company.
According to a new Automotive News article, Cerberus is planning to give away its entire stake in Chrysler - roughly 80% of the company - to labor and creditors.
Bush’s loans require Chrysler to provide half of its obligation to the UAW Employee Beneficiary Association trust with equity. In addition, Cerberus has said it would exchange UAW agreement with severe pay and benefits reductions for equity. Cerberus is also offering equity to creditors in return for lowering of debt.
As a result, Chrysler would be entirely owned by labor, creditors, and Daimler. It appears that the UAW (including the health-care fund) would have the most equity. The move leaves Cerberus with Chrysler Financial, which is likely to be a strong profit-maker when the economy turns around; the private equity firm has already agreed to invest the next $2 billion in Chrysler Financial profits in Chrysler, LLC.
Cerberus also noted that it had not invested more in Chrysler because its charter limits how much it can invest in any one organization.
The move should put aside rumors of merging with General Motors and being purchased by a Chinese company.
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From: Owensboro KY
So now instead of the UAW killing Chrysler , Chrysler will kill the UAW . They can't sell it . Nobody wants it . They can't operate it . They don't have the finances . All Cerebus wanted was Chrysler financial anyway .
The manufacturers said no one would buy vehicles from a company in bankruptcy . Who is going to buy vehicles from a manufacturer owned by UAW ?
The manufacturers said no one would buy vehicles from a company in bankruptcy . Who is going to buy vehicles from a manufacturer owned by UAW ?
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