Opinion: More on Chrysler, bankruptcy and the UAW
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Our skeptical editorial on the government-arranged marriage between Chrysler and Fiat (with a federal bankruptcy judge to deliver the vows) drew this rebuke from reader ‘JVW,’ who didn’t much care for it (but didn’t say why):
Replace the words ‘Chrysler’ and ‘GM’ with ‘LA Times’ and ‘NY Times’ and replace ‘cars’ with ‘news.’ Then replace ‘smaller’ with ‘honest’ and ‘fuel-efficient’ with ‘less ideological’ and the editorial works just as well. But I am sure that irony is lost on your editorial boards and newsrooms as you race the automakers to bankruptcy.
If it’s a race, JVW, we win!! Our parent company, Tribune, been in bankruptcy since December. But your comment has me confused. The editorial said the administration’s enthusiasm for smaller and more fuel-efficient cars wasn’t shared by the public, whose purchase decisions will be the ultimate arbiter of Chrysler’s fate. Are you saying that the government wants honest and less ideological news, but the people don’t? Or that the Times on both coasts need to hook up with Italian publishers to become more honest and less ideological?
More seriously, several other readers argued that Chrysler will be doomed by the deal because the UAW will control 55% of its stock. Yes and no. A union-run trust fund to finance retiree health-care benefits will receive a ton of Chrysler stock and an IOU in lieu of the $4.6 billion in cash the automaker was due to pay. I don’t see how this trust (or VEBA, in industry parlance) could afford to hold onto the Chrysler shares. Wouldn’t the cost of providing health benefits force the VEBA to cash out its holdings in fairly short order? And given the experience employees at WorldCom and Global Crossing had when their retirements were pegged to their company’s stock, wouldn’t Chrysler’s retirees be the first to demand that the VEBA find a safer investment ASAP? Any thoughts, readers?