Andrew Taylor" />
side bar
Monday, October 2, 2023


Court delays could kill Chrysler

On June 8, Supreme Court Justice Ruth Bader Ginsburg ordered a hold on the sale of Chrysler’s assets to Fiat. The company’s debt holders are seeking a full review by all nine members of the Supreme Court in fear that a sale could cause severe losses to the worth and life of their pensions. The stay that was ordered by Justice Ginsburg has struck fear in some about whether the deal will go through at all.

But Italian automotive company Fiat is not worried. Chief Executive Officer Sergio Marchionne expressed his patience and desire to acquire the suffering automotive conglomerate. In a telephone interview moments after the Supreme Court ordered the stay, Marchionne said that Fiat would ‘never walk away’ from a deal to acquire Chrysler.

The stay ordered by Justice Ginsburg was a minute victory for the debt holders, but the final sale of Chrysler is still expected to occur in the next few days. Chrysler is recording daily losses of $100 million. The value of the pensions held by Indiana State Police Pension Trust is worth $42.5 million according to court documents.

Chrysler has said the sale is necessary to fight the massive job losses of its employees and part suppliers as well. The company has reported the sale would save 38,500 jobs from its payroll alone.

Although the pension fund holders have a right to be worried about their assets, the life of the Chrysler sale is important. The added debt of the pension holders could be painful to the sale, possibly even killing it.

Although Fiat remains interested every day Chrysler sits in bankruptcy is more painful than last. Chrysler’s losses dwarf the pension holders’ in comparison.

The other option would be the total liquidation of Chrysler’s assets. The liquidation might change the reality of Fiat purchasing Chrysler, despite what its CEO said to reporters.
Chrysler and its debt holders are now stuck in an intense tug-of-war, with the loser surely to be left disappointed and enraged.

‘If the closing of the deal is delayed by more than 10 days, it will cost the government another $1 billion of federal funds to staunch the company’s losses, forcing the Treasury to either advance more money, or abandon its role in the transaction,’ Solicitor General Elena Kagan said.

Those $1 billion comes from the taxpayers and lessens the significance of the pensions owed to the officers in Indiana. Bankruptcies of this scale are bound to hurt someone.

Minimizing the pain should be the goal.

Andrew Taylor is an economics junior and may be reached at [email protected]

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top ↑
  • Sign up for our Email Edition

  • Polls

    What about UH will you miss the least this summer?

    View Results

    Loading ... Loading ...