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Thursday, April 30, 2009

Labor Union takes over bankrupt Chrysler

All roads lead to Socialism it seems.

As giant US car-maker Chrysler filed for bankrupticy (which is uspposed to be only a temporary measure), it was revealed that the confidential deal leading to this protective measure involved a 10% public stake (8% by US government and 2% by Canadian provincial governements), an alliance with Italian car-maker FIAT, that gets a 20% stake, and a majority stake by a union-run VEBA (probably affiliated to UAM, not 100% sure right now).

This in Spanish legal code would be roughly a "Labor Corporation" (Sociedad Anónima Laboral), which is considered a good alternative to the somewhat restrictive pure cooperative system, and allows private capital as long as it has no more votes than workers. The essentials are the same though: the control of the company now belongs to the workers.

In turn the current owners, mostly private equity firm Cerberus and, secondarily, Daimler, will forfeit their stakes. Bondholders will be given $2 billion in exchange of forgiving heir $7 billion debt; this has been approved by the banks, that hold 70% of Chrysler's debt, but not by hedge funds, who have been accused by the White House of blocking the deal, against their own interest and that of the company and the nation. The final decission will be taken by a tribunal.

As part of the deal Chrysler will recieve also $14 billion in public loans.

If the bankrupticy deal is ratified in court, the giant car-maker company will from now on be owned by its workers and won't be anymore a symbol of Capitalism.

I want to think that this is how Communism will become real. Not sure though. What do you think?

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