Mr Obama blames the bondholders for Chrysler’s problems. In his world people should save, lend their money to a car company, and then convert the loan to a gift. Apparently a company has a right to pay its executives too much, to give generous benefit to its employees, to sell too few cars and then to get a donation from the lenders.
He should stay out of the restructuring. It makes him look weak and cross when they don’t all do what he says. Putting Fiat together with Chysler is putting two weak companies together. That does not normally make a strong company. Chrysler either has to come up with cars people want to buy, or make major reductions in capacity and cost. There is no third way or easy route to riches. Mergers are fashionable amongst governments. They are also anti competitive, put off the day of reckoning, and make the companies too large to fail.
If people are keen to buy Fiat cars, Fiat should negotiate with US dealers and set up a dealer network. If Chrysler think they could make and sell Fiat cars at a profit they should licence the models they think can work. If Fiat think a merger is the way to US taxpayer subsidy they may be disappointed. If Chrylser thinks Fiat has all the answers on how to sell more cars in the USA they are in for a surprise.