Chrysler bailout & bankrupcy moves engine plant to Mexico

[vaskidmark]

Fox News is repoerting that the Kenosh (Wisc) Engine Plant is being closed and moved to Saltado, Mexico.  Per Fox, this took place after

- bailout funds
- workers relocated from closed plants/jobs in Detroit to Kenosha plant
- unions in midst of negotiations on givebacks
- bankrupcy hearing still in progress

So it seems that my investment in Chrysler was actually part of a plan to stem the tide of illegal immigration by creating high-paying jobs (relatively speaking) in Mexico, to intice Mexicans to stay at home.

I'm not sure if I should be outraged at the deception and duplicity of Chrysler in screwing American union workers, or outraged at the duplicity and deception of Chrysler in acting as the means for Obama to address the illegal immigration issue.

Right now all I can figure out is that not only were we all screwed, but we are going to continue getting screwed.  (Like that is news?)

stay safe.

skidmark

[Brad Johnson]

I would be outraged at the administration using strong arm-tactic to force them out of the country.  They were told point-blank to cut costs, or else.  When manpower is the largest single line-item expense, moving the operation to a place where manpower is cheaper is the single fastest and most cost-effective solution.

Brad

[vaskidmark]

Brad -

Wasn't the bailout supposed to save jobs, among all the other hooey?  Admittedly not a top priority, but stil ....

I know that a large portion of the autos sold by companies thought to be American are assembled in other countries, from parts made on other countries.

It was just so saddening to see the vacant looks on the faces of the UAW folks in Kenosha when they were saying they felt as if they had been sold out by Chrysler.  It was almost as saddening to see the Obama buttons on their tear-stained shirts.

stay safe.

skidmark

[Scout26]

Anything bad can easily be made much worse by getting the government involved.  - Me

[Harold Tuttle]

My 1998 mexican VW 2.0L started burning oil at 25K miles
My 2002 german VW 1.8T doesn't burn any oil at 85K miles

[Standing Wolf]

I'm still not going to buy any Chrysler products.

[makattak]

I'm sorry, but I can only boycott a company once.

The government takeover was all it took.

Add to that the fact that union workers caused this, so I'm not feeling too sympathetic, anyway.

[Balog]

Union drones deserve what they get. If they'd done this earlier they might not have needed the fed.gov to steal my money to bail their useless asses out.

[El Tejon]

The problem is that Chrysler did not do this 20 years ago.

[AZRedhawk44]

Ford has a plant in Hermosillo, Mexico.  I think it does electrical cabling assembly, but it might do other components.  They probably have other mexican plants on top of that.

My big gripe against Chrysler and the bailout is the fact that huge amounts of Chrysler stock were turned over to UAW, who promptly decided to sell it rather than keep it.

Why on earth would they do that? 

[makattak]

Ford has a plant in Hermosillo, Mexico.  I think it does electrical cabling assembly, but it might do other components.  They probably have other mexican plants on top of that.

My big gripe against Chrysler and the bailout is the fact that huge amounts of Chrysler stock were turned over to UAW, who promptly decided to sell it rather than keep it.

Why on earth would they do that? 

Good investment strategies?

[Marnoot]

Why on earth would they do that? 

How could they whine and complain and coerce if they were the owners?

[Monkeyleg]

Maybe the UAW should go on strike against itself.

This is an incredible story. First Bush and Obama violate the Constitution by appropriating TARP funds that congress had originally designated for financial firms and giving the funds to auto companies. Then Obama illegally inserts himself into bankruptcy proceedings, extorts Chrysler's bond holders, and gives the UAW, a strong campaign supporter and contributor, 55% of the company. Obama then makes public comments that undermine Chrysler's position in negotiations with Fiat.

And the UAW is complaining that Chrysler's management did something wrong?

[Marnoot]

Maybe the UAW should go on strike against itself.

This is an incredible story. First Bush and Obama violate the Constitution by appropriating TARP funds that congress had originally designated for financial firms and giving the funds to auto companies. Then Obama illegally inserts himself into bankruptcy proceedings, extorts Chrysler's bond holders, and gives the UAW, a strong campaign supporter and contributor, 55% of the company. Obama then makes public comments that undermine Chrysler's position in negotiations with Fiat.

And the UAW is complaining that Chrysler's management did something wrong?

Unions are incapable of having villains other than "Management." Wouldn't matter if space aliens came down and vaporized the factory, it'd be Management's fault that people were out of work.

[K Frame]

Chrysler ceased to exist for me in 1992.

[Brad Johnson]

My big gripe against Chrysler and the bailout is the fact that huge amounts of Chrysler stock were turned over to UAW, who promptly decided to sell it rather than keep it.

Why on earth would they do that? 

Stock turned over to UAW = Free POTENTIAL money
Stock turned over to UAW, who then promtly sells it = Free ACTUAL money

Brad

[Racehorse]

What I want to know is what kind of moron is actually buying Chrysler or GM stock right now?

[drewtam]

What I want to know is what kind of moron is actually buying Chrysler or GM stock right now?

If no one was willing to buy, GMs price would be $0.00 instead of $1.21
Some people are betting there is a 1/10,000 shot the company can be made solvent, restructured, bankrupted, bailed out, subsidized, or whatever back into profitability. If that happens, then the stock can easily go up by 100, 200, possibly a 1,000%. Nice potential returns; the risk is minimal at $1.21 a share.

[Car Knocker]

Ford has a plant in Hermosillo, Mexico.  I think it does electrical cabling assembly, but it might do other components.  They probably have other mexican plants on top of that.

The Ford plant I went to in Hermosillo in the early '90s assembled the Ford Escort and the Mercury Lynx.  I believe it transitioned to assembling the Ford Focus.

[Marvin Dao]

If no one was willing to buy, GMs price would be $0.00 instead of $1.21
Some people are betting there is a 1/10,000 shot the company can be made solvent, restructured, bankrupted, bailed out, subsidized, or whatever back into profitability. If that happens, then the stock can easily go up by 100, 200, possibly a 1,000%. Nice potential returns; the risk is minimal at $1.21 a share.

It's actually a far worse bet than that.

The current Treasury plan is to have GM magically convince the bondholders to go into restructuring without resorting to bankruptcy. In order to do that, GM would increase the number of authorized shares to some 62B (currently 610M), reduce the par value to $0.01, then effect a 1:100 reverse stock split. GM would then use those newly created, 1:100 reverse split shares to pay off the US Treasury, UAW, and bondholders. Existing common stockholders kinda get screwed...

The more likely scenario is that GM goes into Chapter 11. Existing common stockholders get screwed a bit more than they did before on the theory that a cent on the dollar is better than no cents...

[Racehorse]

If no one was willing to buy, GMs price would be $0.00 instead of $1.21
Some people are betting there is a 1/10,000 shot the company can be made solvent, restructured, bankrupted, bailed out, subsidized, or whatever back into profitability. If that happens, then the stock can easily go up by 100, 200, possibly a 1,000%. Nice potential returns; the risk is minimal at $1.21 a share.

I understand the theory and the math. My point is that with the government running these companies, there is zero chance of a recovery and eventual return on the stock purchase.

Saying the risk is minimal at $1.21 a share is inaccurate. $1.21 can go to $.10 just as easily as $5.00, which means that there's plenty of risk.

[Headless Thompson Gunner]

My big gripe against Chrysler and the bailout is the fact that huge amounts of Chrysler stock were turned over to UAW, who promptly decided to sell it rather than keep it.

Why on earth would they do that? 

You can't blame the man for all of your troubles when the man is you.

[Headless Thompson Gunner]

What I want to know is what kind of moron is actually buying Chrysler or GM stock right now?

Speculators.  There is a chance that the company could recover.  People are willing to bet on that chance.

[Hawkmoon]

I stopped at a Chrysler/Jeep dealer this very afternoon, to buy a part for my trusty old Jeep. The guys in the parts department were looking rather woebegone. When I asked why, they said they don't know IF their dealership will stay in business. This happens to be one of the larger, and most successful, Chrysler/Jeep dealers in the state. Seems the .gov told Chrysler to cut costs any way they could, and one of the ways they are taking is to force some dealerships to close.

This makes zero sense to me, since the dealerships don't belong to Chrysler, but apparently some of the appurtenances (exterior signage, specialty tools and equipment, etc) does belong to Chrysler rather than to the dealers, so Chrysler may just pull the rug out from under many of the smaller dealerships.

Great way to restore the economy, ain't it? Force otherwise viable, locally-owned, people-employing companies out of business so the parent corporation can have its signs back.

Thank you, President Obama, for rescuing us.

[RevDisk]

Speculators.  There is a chance that the company could recover.  People are willing to bet on that chance.

I'd buy a hundred shares after the reverse split.  Price will probably be well under a buck at that point.

...

Na, I'll probably just short it.