...in a blazingly short amount of time, the Administration has forged a deal that could save thousands of jobs at Chrysler--the major banks are on board, the UAW has made more significant concessions. But all that may come crashing to a halt because of a few hedge funds who are holding the entire car industry hostage because, boo-hoo, they aren't getting enough out of the deal. What a spectacle.Spectacle? Yeah, in a Bonnie & Clyde or Godfather sort of way.
As Tasini points out, the president lived up to his pledge, the UAW accepted concessions...
On top of concessions already given in 2005, 2007 and 2008, the UAW members have agreed to accept cuts in pay and benefits.And even the major debt holders were on board.
Led by J.P. Morgan, the banks holding 70 percent of Chrysler's debt agreed to a deal that would effectively mean they would have to write-off a health chunk of change.Everyone sacrificed and the administration even tossed more cash on the table and it still wasn't enough for the greedy hold outs.
Three of the bank-debt holders on the bank-steering committee, Oppenheimer Funds, Perella Weinberg Partners' Xerion Capital Fund and Stairway Cap Management, told J.P. Morgan and the other large lenders on a bank call Tuesday that they wouldn't support the deal and would advise other lenders not to support it.I'm not a financial expert, but I think that's just dumb. Tasini thinks it's dumb too.
Even if the hold-out hedge funds refuse to make a deal by midnight tonight, forcing Chrysler to file for bankruptcy, they are unlikely to do any better in the swift bankruptcy proceedings envisioned. Do the geniuses at Perella et al. think that a bankruptcy judge, looking at a deal that has the blessing of the U.S. Treasury, the banks holding 70 percent of the debt, and the the union representing tens of thousands of workers (not to mention Fiat, which is waiting in the wings to scoop up Chrysler) will dramatically alter the outlines of the deal? No.And they wonder why a majority of the public believes corporate America (and particularly the financial industry) needs a new moral direction.
But, here we are: American workers, the Administration and the public generally is being held hostage by a few deal makers who run the very kind of financial firms that evaporated trillions of dollars in wealth. [emphasis mine]