Not Feeling Screwed? You Should Be.
Posted in: UncategorizedBest Week Ever
Late last week, Chrysler filed Chapter 11 bankruptcy, and Omnicom’s BBDO Detroit was listed as the second-highest unsecured creditor, with some $58+ million in outstanding invoices. Most of the dollars are believed to be for spot TV buys placed when Chrysler opted to dump it’s national advertising to save money. The Chapter 11 filing gives the carmaker time to restructure under government protection from creditors. So, while Chrysler does NOT have to pay their creditors at the moment, they will still receive cash infusions from Uncle Sam. Now that is what I call the American Dream!
Like a spoiled child whose parents are too weak to say the word, “NO,” Chrysler now finds that they are in great shape: safe from creditors and still receiving their billion dollar allowance. Chrysler, of course, is not celebrating…or are they? The automobile company may not be dancing, but they are acting as if they’ve got America by the short hairs. Sadly, with backing from Obama, they do. Thus it’s no surprise that Chrysler is launching a national, prime-time TV, newspaper, and digital campaign set to hit the public on May 11th, 2009. The tagline for the campaign is, “We’re building a new car company. Come see what we’re building for you.” This move back to the national advertising arena must mean Chrysler does not need to worry about reducing expenses anymore. Whew!
What Do You Mean You Want The Money?
Well, no, that’s not the truth. The real story is that Chrysler does not intend to repay dollars borrowed from private interests prior
to government intervention. The private “investors” are unlikely sources; the University of Kentucky, Kraft Foods’ retirement fund, the Bill and Melinda Gates Foundation, pension funds, and teachers’ credit unions. The Obama administration is not going to let that happen, and has even berated the companies that were willing to bet on a loser (Chrysler) as “a small group of speculators” who “endanger Chrysler’s future by refusing to sacrifice like everyone else.” This, despite fact that the terms of the agreement state that lenders would be repaid first should bankruptcy became a reality.
The Final Straw
In a last “screw” you from the government and Chrysler, it is now being reported that taxpayers will never see a single dollar of the billions lent to Chrysler. From Monday’s bankruptcy hearings:
“They’re offering financing with a low likelihood of being repaid,” said Robert Manzo, an executive director for Capstone Advisory Group LLC, according to the Associated Press. As part of its Chapter 11 reorganization, Manzo wrote Chrysler expects the U.S. Treasury to forgive a $4 billion bridge loan the automaker received during the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing the Obama administration approved last week to help the company stay afloat while it is in bankruptcy.
CNN did confirm that the Obama Whitehouse stated that it did not expect Chrysler to repay the money. It’s interesting, but Bernie Madhoff went to prison for less than this.
Jeff Louis: Strategic Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: linkedin.com/in/jefflouis or twitter.com/jlo0312..Jeff Louis: Strategic Media Planner, Project Manager, and New Business Coordinator. His passion is writing, contributing to BMA as well as freelancing. He’d love to hear from you: linkedin.com/in/jefflouis or twitter.com/jlo0312.
