Behind The Chrysler Negotiations: Intriguing Details

This from the WSJ is one of those kiss and tell sort of stories about the events surrounding the bankruptcy of Chrysler. It contains a lot of material that was gleaned from emails that are part of the court proceedings so it’s not rumor but the real deal. It doesn’t add a lot to anyone’s general knowledge but it’s good Friday night fluff.

Here’s part of it. The exchanges take place in the days leading up to the BK. The players are Mr. Manzo, a Chrysler advisor, Mr. Nardelli, Chrysler’s CEO, Mr. Feldman, a Treasury Department official and Mr. LaSorda, Chrysler’s Vice Chairman:

Despite the push to do a deal with Fiat, Chrysler advisers continued into April urging the Treasury to think again about a potential merger with GM. Earlier talks between the two auto giants had broken down in November, and the Obama administration put little stock in the idea.

On April 10, Mr. Manzo emailed Mr. Nardelli to say he told the Treasury to reconsider a GM pair-up. Four days later, Mr. Manzo sent an email to several Treasury officials, as well as Messrs. Nardelli and LaSorda, urging them to reconsider.

“We continue to believe that revisiting the combination/alliance discussion with gm from the fall is the best alternative for all parties,” he said.

In an interview, Mr. Manzo said conflicts will happen when a company like Chrysler is asking for money from a lender, particularly the government. He also said the emails reflected his “fiduciary duty to get the best value” for Chrysler.

Just before the filing, tensions boiled over. Mr. Manzo offered a suggestion to Mr. Feldman about making a last-minute offer to Chrysler’s debt holders. “I’m now not talking to you,” Mr. Feldman wrote back.

The next morning, hours before President Obama announced the bankruptcy, Chrysler President Mr. LaSorda emailed Mr. Manzo asking if Chapter 11 filing was inevitable.

“Not good,” Mr. Manzo replied. “These washington guys want to show the market (gm, delphi….) that they can be tuff. We are the gueni pigs unfortunately.” 

Like I said, it’s just for fun. There will, I’m sure be a lot more. Given all of the bruised egos and the ideological angles to the auto industry bailouts, I suspect that the books that come out are going to be pretty juicy. There are a lot of scores to settle.

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