Muscle Cars

Why is the government so concerned about the Chrysler deal?

Admittedly, autos matter to our economy. But there’s only, say, 60 thousand jobs at stake. While that’s a lot in itself, it’s just about a tenth of the US auto workforce, and it represents only 2.5% of the jobs lost so far this year. So why should the Obama administration risk political intervention in the judicial process?

I think it’s because Chrysler is a dress-rehearsal for a potential GM bankruptcy. GM reported a $6 billion dollar loss in the first quarter, and their sales were down 50% from a year ago. Unless the economy rebounds like a bungee jumper on rebound, they won’t escape some kind of bankruptcy.

And when that happens, the UAW will be ready. Chrysler was a warm-up in the bullpen. GM is the real show. By limbering up now, the government’s lawyers, bankers, and PR people are ready to muscle GM away from the investors and hand it to the Union.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-04T20:56:30+00:00 May 11th, 2009|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. –
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