No doubt the bankruptcy filing will allow Chrysler to shed some crippling legacy costs — which is a nice way of saying that Chrysler workers, current and retired, are going to lose a lot of benefits. In return, the UAW’s retiree health fund winds up with a 55% ownership stake in the new company. I hope, for the sake of retirees, it’s worth giving up vision and dental care.
Mainly, though, I wonder at the enthusiasm for a merger with Fiat. Less than five years ago, Fiat was nearly broke and grasping at straws. In fact, it was involved in a joint venture with General Motors, and it was trying to force GM to buy it out.
Apparently Fiat’s fortunes have turned somewhat — although it isn’t contributing any money for a 35% share of the new Chrysler. I just wonder — if Mercedes-Benz couldn’t save Chrysler, how can Fiat?