Wednesday, April 1, 2009


The most important aspect of negotiations is the balance of rights and power. For example, if one party has all of the legal rights to enforce their claim and they have all the money, the other party will find it in their best interest to settle the during negotiations.

"In the case of Chrysler, Obama said the company must have a partner to stay in business. He gave Chrysler 30 days to reach a merger agreement with Fiat, which has agreed to build fuel-efficient cars in the United States and repay U.S. taxpayers for new investments made before Fiat assumes majority ownership, he said." -npr

This shotgun merger is not helping Chrysler is any way. Fiat now has every reason to hold out for exactly what they want. President Obama has handed the Italian company all the power they need to eliminate any legal rights Chrysler may have had. Yay globalization!

My recommendation: Chrysler management needs to suck it up and make the hard decision is file a chapter 11 bankruptcy. It is understandable that they fear for their jobs, but if they have any sense of loyalty to the company itself, they should buck up and make the hard decisions.

I can only imagine how satisfied Ford must be with themselves for turning down the TARP money. It may have been the best decision they ever made.

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