The auto bailout was not a success for bondholders and taxpayers

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Calling the federal bailout of Chrysler and GM a success is preposterous ("Chrysler's Comeback: The Company's Rebound Is Another Bailout Success," Dec. 23 editorial). Can anyone at the PG do simple math? Does anyone on your editorial board really think this strengthens the rule of law in this republic?

Let's start with Chrysler. First, the secured bondholders got shafted when the administration decided to ignore the existing bankruptcy code. This act, in itself, was an outrage worthy of scorn. The very idea that laws can be ignored with impunity by an overzealous administration means that we are no longer a nation of laws.

Add to that the fact that roughly $13 billion of taxpayer money was poured into this operation and the government saw $3 billion out of it. Now the company is run by Fiat, whose own financial position is precarious. There are a number of industry insiders who believe that Fiat/Chrysler will need to be bailed out again before the end of the decade.

At GM, the circumstances were similar. Bondholders were railroaded and the taxpayers are stuck with a $31 billion loss. Part of this deal included paying 18-percent interest on bonds that were used to fund the UAW's pension plan. GM's market share is now an abysmal 16 percent of the U.S. market. That is compared to a 24- percent market share in 2007. It is about to become the world's No. 3 automaker as Volkswagen is passing it by -- despite the fact that European car sales are falling.

If this is your collective idea of success, you really need to start reading some Adam Smith instead of Karl Marx. This is a shining example of why socialism doesn't work.

CHRIS MOONEY
Whitehall


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