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Obama: Bankruptcy Is 'New Lease On Life for Chrysler'

UPDATED at 12:40 P.M.:

Merging with Fiat and entering Chapter 11 bankruptcy will provide a "new lease on life for Chrysler," President Obama is saying right now.

"This is not a sign of weakness but one more step on a clearly marked path" to Chrysler's recovery," he said.

Obama said the tie-up with Fiat and the bankruptcy will save "30,000 jobs" at Chrysler and "tens of thousands" elsewhere in the auto industry.

One of the jobs saved will not be that of Chrysler chief executive Bob Nardelli, who will leave the company after it emerges from bankruptcy.

In an interview on CNBC that concluded moments ago, Nardelli said that Treasury did not ask him to step down.

Obama had tough words for the Chrysler creditors who refused to capitulate to bankruptcy.

"A group of investment firms and hedge funds decided to hold out for an unjustified taxpayer-funded bailout. Everybody else would have to make sacrifices and they would make none," Obama said, sternly. "I don't stand with them. I stand with Chrysler's employees."

Chrysler "papered over tough problems for years," Obama said.

The White House expects that under what it is calling a "surgical" bankruptcy, Chrysler came emerge from the reorganization within 30 to 60 days, a figure greeted with extreme skepticism by bankruptcy veterans.

Obama said that his team will continue to work with General Motors.

-- Frank Ahrens
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By Frank Ahrens  |  April 30, 2009; 12:40 PM ET
Categories:  The Ticker  | Tags: Chrysler, Obama, bankruptcy  
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Comments

And who do those big bad investment firms and hedge funds represent? Primarily mutual funds and pension funds who's shareholders and participants are, you guessed it, regular folks like you and me. The Obama populist rhetoric may sound good to the labor unions, but it puts scores of pension fund investors at a disadvantage.

Caving to the UAW simply furthers a transfer of wealth from the U.S. taxpayer and your pension fund to the U.S. autoworkers who don't even need a high school diploma for the chance to earn a six-figure pay package. Sounds real American.

The UAW will be in for a rude awakening because it can't continue to have unsustainable high wages for its workers while it owns stock in the very manufacturers who can't afford to pay them. You can't always have your cake and eat it too, Mr. Gettelfinger.

Posted by: RambleOn | April 30, 2009 1:09 PM | Report abuse

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