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Posted by: David Welch on May 01, 2009
It was just a handful of firms who pushed Chrysler into bankruptcy. And they may feel the wrath of politicians whose states rely on Chrysler for jobs. A few firms refused the Treasury Department’s offer of $2.25 billion for the $6.9 billion Chrysler owed them. While most of the creditors agreed to take the cram down, the hold outs were enough to push Chrysler into bankruptcy.
Michigan’s politicians are moving to lock them out of any business dealings in the state. The State’s House of Representatives issued a statement asking the state not to do business with Oppenheimer Funds, Perella Weinberg Partners’ Xerion Capital Fund and Stairway Capital Management, according to a Reuters report. Michigan’s House of Representatives even asked neighboring states Indian and Ohio to join in and divest any holdings with those firms.
Will it have much of an impact? Probably not. Michigan doesn’t even have pension money with those firms. And outside the industrial Midwest, it’s easy enough to find taxpayers who are angry over bailouts for banks and carmakers but also blame Wall Street for the economic woes the nation faces. But there are seeds of a backlash. One CNN anchor was trying to find out names of the holdouts to list them onscreen yesterday. Now that the firms have been identified, we’ll see whether the public is more angry with Wall Street or Detroit, which has is own image problems to solve
Want the straight scoop on the auto industry? Detroit bureau chief David Welch , Dexter Roberts and Ian Rowley bring daily scoop, keen observations and provocative perspective on the auto business from around the globe. Read their take on such weighty issues as Detroit’s attempt at a comeback, Toyota’s quest for dominance and the search for an efficient car.