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December 23, 2008
Cerberus and Chrysler
Cerberus is apparently willing to dump its equity in Chrysler if bond holders or others will take equity for their debt. Indeed, Cerberus could simply give the company to its workers in exchange for a full release from all worker obligations (including health care and pensions). Then we would see how the UAW could do running a company
December 23, 2008 | Permalink
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Comments
UAW ownership actually makes a lot of sense for both Chrysler and GM. Both companies have as leading creditors, retirement obligations and laid off worker obligations for which the UAW acts a bit like a bond trustee. Those debts are serious impediments to the fiscal health of the firms which would be much healtier without so much long term debt.
A debt for equity swap would bring balance sheets into the positive zone, while keeping in tact warranty and other trade credit obligations that need to be honored for the health of the companies.
Posted by: ohwilleke | Jan 1, 2009 9:43:04 PM
