Chrysler to File for Bankruptcy

[MadImmortalMan]

It is evidence of it but not proof in itself.  You would have to look at the benefits the union settlement brings to the reorganized entity.

And then compare that against the benefit the reorganized entity might have had by disconnecting itself from its relationship with the union entirely.

[The Minsky Moment]

Is it really feasible to reorganize and hire an entire new workforce of non-union labor at the same time?

[Ed Anger]

If I was a dealer being dropped, I'd be frothing at the mouth right now.

[MadImmortalMan]

Is it really feasible to reorganize and hire an entire new workforce of non-union labor at the same time?

Only under liquidation and re-start I would think.

[alfred russel]

CDS are privately negotiated so what may constitute a triggering event may vary - a bnakruptcy filing is not necessarily required.

There is no connection between status as a secured lender and holding CDS (although secured lenders may indeed also be CDS holders)

A secured lender is just a lender who has obtained a secured interest in an identified asset in return for a loan.  Just like a mortgage in the RE context.  In the case of Chrysler it might be some equipment, or inventories of unsold cars, or real estate holdings, or receivables owed to them.  Holding a CDS is not a secured interest.

A few years ago I read an article about how aggressive the auto companies were in coming up with ways to secure their debt: Ford for example issued debt secured by its rights to the blue logo it uses.

[alfred russel]

Is it really feasible to reorganize and hire an entire new workforce of non-union labor at the same time?

Only under liquidation and re-start I would think.

But how would you do that? You would take over a bunch of plants with idle equipment and no one to run them or maintain them. How would you hire a competent workforce that could get the plants running before the equipment suffered too much damage and you weren't just a memory in the marketplace (after your suppliers and dealers moved on or went under). Even if you did do that, your workers would probably have a large number of ex UAW guys, what would keep them from unionizing again?

It is probably not very practical.

[KRonn]

So, who is going to buy a Chrysler soon, or in the near future? Probably some good deals right now, and more in the future. I'm not a Chrysler fan and so far this all has an even more negative affect (on me) about buying Chrysler autos.

[Berkut]

Is it really feasible to reorganize and hire an entire new workforce of non-union labor at the same time?

They don't have to hire an entirely new workforce, they could hire a subset of the existing workforce.

[Berkut]

Is it really feasible to reorganize and hire an entire new workforce of non-union labor at the same time?

Only under liquidation and re-start I would think.

But how would you do that? You would take over a bunch of plants with idle equipment and no one to run them or maintain them. How would you hire a competent workforce that could get the plants running before the equipment suffered too much damage and you weren't just a memory in the marketplace (after your suppliers and dealers moved on or went under). Even if you did do that, your workers would probably have a large number of ex UAW guys, what would keep them from unionizing again?

It is probably not very practical.

Of course it is. You hire back the same exact people. Even if they unionize again, so what? That union would have to negotiate new contracts.

[The Minsky Moment]

they would have to enter into an entirely new set of contracts for every single worker.  And the union would go all out to picket and pressure members against breaking ranks.

I am not saying its impossible.  Just that it is reasonable for a bankruptcy judge or trustee to think that it isn't the wisest course of action.

[Berkut]

They would enter into the same set of contracts that every other employer in America uses - here is the deal, take it or leave it. Or they would take it, because at that point the union would no longer have any power.

And sure, the union would scream and yell, but that is kind of the point. The union needs to be broken, and given that the union IS the problem, to a great degree, I think it is certainly the wisest course of action.

Which, I suspect, is why the union and their chief lawyer Obama want no part of it,and would rather "restructure" and just hand Chrysler over to the union. Amazing that the solution is to hand the business to the very group that has spent the last 2 decades driving it into the ground.

It is clear to me that the goal is not to save Chrysler, the goal is to save the UAW.

[DGuller]

they would have to enter into an entirely new set of contracts for every single worker.  And the union would go all out to picket and pressure members against breaking ranks.

I am not saying its impossible.  Just that it is reasonable for a bankruptcy judge or trustee to think that it isn't the wisest course of action.

Why do you need a contract for every single worker?  Are they all going to be CEOs or something?

[Ed Anger]

So, who is going to buy a Chrysler soon, or in the near future? Probably some good deals right now, and more in the future. I'm not a Chrysler fan and so far this all has an even more negative affect (on me) about buying Chrysler autos.

They are supposedly going to offer a 1000 bucks off to previous Chrysler owners, so who knows. I'd have to see what they got.

[The Minsky Moment]

They would enter into the same set of contracts that every other employer in America uses - here is the deal, take it or leave it. Or they would take it, because at that point the union would no longer have any power.

And sure, the union would scream and yell, but that is kind of the point. The union needs to be broken, and given that the union IS the problem, to a great degree, I think it is certainly the wisest course of action.

That will take time, and time is the biggest enemy of a reorg.

[The Minsky Moment]

Why do you need a contract for every single worker? 

b/c most people won't work for free?