Voros: Fiat joyriding on American taxpayers
Drew Voros, Business editor
Posted: 05/05/2009 01:20:09 PM PDT
Updated: 05/05/2009 01:20:11 PM PDT
Let's add this up: We taxpayers lent Chrysler some $4 billion, only to see the company towed into bankruptcy court last week, putting repayment of that money in question; now the Obama administration has pledged to float another $8 billion to the broken-down automaker when it pulls out of bankruptcy.
That $12 billion, though, is chump change when it comes to America's trillion-dollar Wall Street bailouts. Most Americans would rather see Uncle Sam prop up an automaker that employs 200,000 people and makes a real product than paying off AIG's $182 billion in bad mortgage bets, of which more than $50 billion landed in foreign banks.
With those numbers in mind, the loans to Chrysler and GM ($17.4 billion with more coming in June) make it seem the auto industry is being short-changed on its lobbying money.
But just when our country's economic drama of budget-busting bailouts and dead-on-arrival loans to failing business enterprises couldn't get any stranger, weirder or more unfair, along comes a new act set to the Dire Straits song "Money for Nothing.''
Fiat, the profitable $12.2 billion Italian automaker, has parked itself right in the middle of Chrysler's bankruptcy restructuring and secured a potential controlling share in the post-bankrupt automaker without putting up a dime.
Here's the deal Fiat couldn't refuse: The U.S. Treasury and the Canadian government would get stakes of 8 percent and 2 percent, respectively, while Fiat
would own 20 percent of equity in the new company, with the right to acquire another 31 percent under "certain circumstances," according to court papers. An employee association would own the remaining shares.
Not sure what "certain circumstances'' means or if it involves any part of New Jersey, but the words "sweet deal" are dripping all over Fiat's piece of the pie.
Fiat "would obtain its stake mainly in exchange for covering the cost of retooling a Chrysler plant to produce one or more Fiat models to be sold in the U.S. Fiat would also provide engine and transmission technology to help Chrysler introduce new, fuel-efficient small cars,'' Bloomberg News reports.
This is the same Fiat technology that brought America the Brava, Spider, Strada and X-19, all forgettable money losers from 1970s and '80s.
Let's do some more adding up: We taxpayers contribute $12 billion to Chrysler, and we get an 8 percent stake. Fiat retools one American factory to build cars with no proven market appeal, reliability or back seats, and it gets majority share of our country's third-largest automaker. Who is negotiating this for American taxpayers, Jack and his Beanstalk?
Is Pat Buchanan in a coma? Have the xenophobes at Fox News quit? Is anyone paying attention as America is being sold down the river, or do we wait until foreign flags are flying above our factories to object?
No other foreign company has been allowed near the bailout feeding trough, and allowing Fiat to wiggle into line is a desperate attempt to save a symbol of America's yesterdays at the expense of children's taxpaying tomorrows.
Drew Voros is the business editor. His column runs on Wednesdays. He can be reached at [email protected]
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