The Supreme Court has put the brakes on Chrysler’s sale to Fiat, after several Indiana pension funds and consumer groups complained that the proposed transaction was unlawful, if not unconstitutional.
Ahead of the decision, Chrysler and the federal government warned such an intervention might lead to the liquidation of the auto maker. But the high court, in a brief order, said it will extend a temporary stay put in place by an appeals court until it has the chance to receive and review routine appeals from groups opposed to the sale.
The Supreme Court’s stay could delay the sale of Chrysler to Fiat by several months. Clearly, this is a blow to the Obama adminstration, which wanted to see an expedited Chrysler bankruptcy process.
>Read the complaint from the Indiana pension funds.
>The Supreme Court’s stay.
I am really torn by this! I’d like to see Chrysler saved and the Fiat deal seems to be the only viable opportunity for them. If its a good deal for Fiat on June 15th, its a good deal in a few weeks. The deadline is artificial at best and probably dreamed up by Fiat and the Task Force to put additional pressure on the various parties. Chrysler’s 2010 model launch IS in serious jeopardy, however.
Unfortunately, it looks like the shedding of dealers is a fait accompli. After watching the Senate hearings on Thursday I am convinced the reduction of dealer count by Chrysler has been primarily driven by the “Task Force.” It’s not clear to me what Fiat had to do with it. In the case of GM, it seems to be totally driven by the “Task Force.” The cost assertions made by the two OEM execs before the Senate committee, Henderson and Press, were bogus at best. They attempted to itemize their “costs” without acknowledging what they charge their dealers to more than offset those costs. Things will eventually work their way out, but not without a lot of unnecessary pain on the part of GM and Chrysler dealers and their employees. The ill will generated will not dissipate quickly. I, for one, will do nothing to help either GM or Chrysler, and I know MANY people of like mind. I hope to see many of their “”rejected” dealers selling imports and cleaning their clocks in their markets! I can imagine the motivation of a “rejected” dealer who is successful in landing another franchise and how they might compete against the OEM who yanked their franchise and hung them out to dry.
Click here to watch a replay of last week’s Senate hearing about the dealership closures. Very worthwhile.
According to the latest reports, Fiat said today that it will continue to pursue the Chrysler sale, even if the June 15 deadline isn’t met.