Obama’s Auto-Czar Steven Rattner Forced Chrysler’s Hand

by Sal on June 8, 2009

in Economy,Politics

President Obama has repeatedly said that he does not want to be in the automobile business.  Yet a feature-length expose in the Detroit Free Press, a rare and daring indictment of the administration by a member of the main-stream media (now dubbed the state-run media by Rush Limbaugh) shows how Obama’s auto-czar Steven Rattner (one of many illegal czars) forced Chrysler into bankruptcy and a merger with Fiat, even as Chrysler proposed viable alternatives.  Chief among the demands of the Obama Administration’s insistence that Chrysler merge with Fiat, the Italian automaker known for it’s manufacturing of small, eco-friendly cars.

Chrysler had apparently come up with plans and found enough savings to avoid Chapter 11, restructure itself, and remain a stand-alone entity.  It was in the process of retooling its car market and discussing a possible merger with General Motors, another victim of the new Government Auto Task Force.  The valuation of such a merger is considered far higher than the merger that ultimately happened with Fiat, and would have paid private bondholders in full, making a good free-market solution to the entire automobile crisis.

Obama’s auto-czar, however would have none of it.  Even as the entire management team of Chrysler urged a different course, Rattner steered Chrysler towards bankruptcy and a merger with Fiat.  Rattner is a former New York Times Journalist who went on to become a rather unsuccessful investment banker, and who now is dictating the direction of the entire domestic automobile industry.  He has no industry experience, and no automobile industry experience.  Yet dispite this lack of knowledge and experience, it appears that he knows better than the Chrysler management team in the eyes of the Obama administration.  Whether there is some motivation behind these forced government mandates or it is just pure incompetence, it illustrates the problem stemming from the bailouts.  Once government gets its tentacles into anything in the private sector, it cannot help but to exhert more influence and control.  What Washington is doing with the current restructuring of the domestic auto industry is nothing short of centralized economic planning, a practice that has never led to prosperity, but has often led to economic ruin.

H/T:  Sweetness and Light

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Supreme Court Issues Stay Against Chrysler Bankruptcy | Axis of Right
June 9, 2009 at 8:25 am

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