Who Is Brian Deese?
June 01, 2009
If you don't know the answer to that question, don't worry. Just go read David Sanger's nice profile of him in today's Times. (Hint: He's the top White House aide overseeing the restructuring of GM and Chrysler--and the administration aide arguably most responsible for helping Chrylser avoid liquidation.) Update: It's probably worth quoting Sanger's summary of the Deese memo that kept Chrylser from being liquidated. It's a pretty important insight when you weigh the administration's approach to the auto industry generally: "Mr.
The End Of Gm As We Know It
June 01, 2009
It's been clear for a while now that General Motors, like Chrysler before it, was headed for bankruptcy. But it's still a huge development. And, at least from the perspective of history, it's still a little stunning. GM was the symbol of American industrial might and, for three-quarters of a century, the world's largest carmaker. Now, in order to qualify or government financial assistance, GM is eliminating half of its brands, shedding dealers by the thousands, and laying off a third of its already diminished hourly workforce.
Gm Trumps Sotomayor
May 29, 2009
I'm at the White House listening in on Robert Gibbs' daily press briefing (which just ended). It's not crazy, but a little surprising to me, that there have probably been 2-3 times as many questions about the looming GM bankruptcy as there have been about Sotomayor. It's both a sign that economic concerns still loom very large, and that the White House has been incredibly deft at rolling out its Supreme Court nominee.
This (from the Journal) seems to suggest so, at least within a certain range: In a sign of how much the doomsday scenario has faded, bank stocks surged Monday despite reports that Wells Fargo was identified in an initial review as one of the financial institutions needing a stronger buffer. The San Francisco bank's stock jumped 24%, or $4.64, to $24.25 in New York Stock Exchange composite trading at 4 p.m. My guess is that the market doesn't want too bleak a picture, but doesn't want a whitewash either.
The Power Of Bankruptcy Judges, A Follow-up
May 04, 2009
Pivoting off a Journal report last week that Chrysler would try to scale back some of its environmental liabilities in bankruptcy court, I asked what other sorts of claims a bankruptcy judge could winnow away. I was particularly interested in tax liabilities. In response, a number of informed readers--including a clerk for a bankruptcy judge and a bankruptcy law professor--wrote in with some really helpful comments.
Bankruptcy Judges Are Powerful
April 30, 2009
Okay, you already knew that--they're basically czars of the companies that slouch into their courtrooms. But did you realize they were this powerful? One reason Chrysler needs to file for bankruptcy protection is so that Fiat can clear out hundreds of auto dealers from its sales network, which is easier to do in bankruptcy where dealer franchisee agreements can quickly be rejected or amended.
Will Bankruptcy Save Chrysler? Maybe.
April 30, 2009
In his prepared remarks at noon, President Obama said the same thing that his senior advisors were telling reporters this morning: Today is a day to celebrate success. Chrysler has arranged a partnership with Fiat, allowing it go forward, restructure, and emerge a stronger, more viable company. The unions are on board. The big creditors are on board. The big holdout was the hedge funds, who held about 30 percent of the company's secured debt and wanted more money. Chrysler will try to deal with those creditors by filing for bankruptcy.
Chrysler Expected To File For Bankruptcy
April 30, 2009
The United Auto Workers, Fiat, and the big creditors had signed off on a deal. But the smaller creditors didn't and, it seems, that unravelled the whole thing. So, today, Chrysler is filing for bankruptcy. Via the Wall Street Journal: The administration's auto task force tried to get all 46 of Chrysler's secured lenders to agree to a debt-reduction deal until talks broke down late Wednesday. President Obama is expected to announce that Chrysler is now going to seek reorganization in bankruptcy court. We'll know more in a little while, when President Obama speaks about the subject.
Guess Who's Buying Chrylser And Gm?
April 28, 2009
You know things are crazy when a partial takeover of the American auto industry by labor unions and the government is, at best, the day's third biggest story. But even with swine flu and Arlen Specter grabbing the headlines, it'd be a mistake to ignore what's happening in Detroit. It looks like the government is close to reaching a deal with Chrysler's creditors, under which they'd write down most of the company's debt.
Pensions And The Smashed Social Contract
April 25, 2009
The social contract has been destroyed, and it has been destroyed on many fronts. I suppose, one might say, that the housing aspect of the social contract was exploded from below when people who really couldn't afford their mortgages bought into them anyway. But, of course, many Americans were literally stampeded into this behavior by banks and other mortgage sellers--and then, as real estate values went up, were stampeded into getting some of their equity out and refinance with the assumption that the price of their house was permanently on the rise.