General Motors and Chrysler may be forced into Chapter 11

By Edward Harrison On Feb 9, 2009

It seems that the Obama Administration is playing hardball with GM and Chrysler. They may force the companies into bankruptcy to protect American taxpayers from having to pony up yet more money for the beleaguered automakers.

I see this as a positive development — although a pre-packaged Chapter 11 solution is the way this should end (a messy bankruptcy could trigger some Lehman-like fallout. The automakers should be handled with care.).

Meanwhile, in Europe, France is bailing out their automakers. “This is not a gift. It is not a subsidy. It is a loan offered at an interest rate of 6%,” French President Nicolas Sarkozy said. Right.

Source
French carmakers get 6.5bn euros – BBC News

Edward Harrison 7783 posts 575 comments

Edward Harrison is a senior Editor at Bloomberg. He is also the founder of Credit Writedowns newsletter, a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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