By KEN de la BASTIDE, Kokomo Tribune staff writer
ken.delabastide@kokomotribune.com
With a federal judge declaring any delay would further erode Chrysler's value, a sale of most of the troubled carmaker's assets to Italian automaker Fiat Group SpA was approved Monday.
The judge's decision came as welcome news to Rep. Joe Donnelly, D-Ind., and Kokomo Mayor Greg Goodnight, who have maintained throughout the bankruptcy process that more federal aid is preferable to liquidation.
"This is the next step in a long-term future for Chrysler," Donnelly said Monday.
Donnelly said the exact form of the new Chrysler is not known, but added that Fiat officials were impressed with the Kokomo facilities during two recent visits.
"Kokomo will be a significant part of the future," he said. "I hope, beyond the transmission production, there will be new products produced in Kokomo.
"All the Chrysler transmission operations will remain in Kokomo," Donnelly continued. "All transmission-related work will remain. The future is much better today than it has been in the past."
Goodnight said the news presented Monday by President Barack Obama that Chrysler and Fiat should emerge from bankruptcy according to schedule also bodes well for the restructuring of General Motors.
"I think [the Chrysler restructuring] is a good thing," he said. "Obama said it would be 30 to 60 days, and he was good to his word. I think there's going to be the same level of commitment to GM.
"I think the fact we started under the Bush administration, which provided some loans, and now with President Obama, they've committed to having a domestic automotive presence."
Goodnight credited all groups involved with the Chrysler negotiations with making concessions to aid the process - the unions, retirees, dealers, shareholders and taxpayers.
"It looks like everybody's sharing in this one," he said.
"It may be painful, but it's better than liquidation."
However, no one should believe Chrysler's bankruptcy is over, said bankruptcy attorney, Jeffrey A. Schreiber.
"I think they are putting too much spin on it to say it's finalized," said Schreiber. "This is just one part of the bankruptcy. It's been a long time coming, so it is a good thing. They are still going to have to decide if any other plants will close and downsizing workers."
The one party still trying to scuttle Chrysler's reorganization plan, approved Monday by federal Judge Arthur Gonzalez, is Indiana Treasurer Richard Mourdock, who announced Monday he'd appeal the judge's ruling.
Mourdock has been the lone voice against the reorganization, saying the judge was ignoring the rights of secured creditors - including state funds Mourdock administers.
Jeb Conrad, director of the Greater Kokomo Economic Development Association, said Mourdock's actions "are enough to make you wonder where his motivation is coming from."
"When you talk about good policy in the long term, well, [liquidation] is a potentially devastating thing, not just for Kokomo, but for the entire state. So how is that good policy?"
But state Sen. Brandt Hershman, R-Monticello, said the judge's ruling could have significant long-term effects on the ability of the newly reorganized carmakers to raise private capital in the future.
"Basically the president said, 'OK, UAW pension fund, you're more important than the state pension fund," Hershman said. "The rules were what they were, and [the administration] just changed them."
Hershman objected to critics of Mourdock, who say the treasurer's stance risked forcing a disastrous liquidation.
If the deal had been structured differently, and the secured creditors had gotten a better deal than the UAW - and the UAW appealed the ruling - would the same critics have accused the UAW of trying to force liquidation? Hershman asked.