Obama administration forced Fiat marriage on Chrysler
byJun 6th 2009 7:00AM
It should not be a surprise to anyone that the Obama administration forced Chrysler into a marriage with Fiat. The government has forced changes in bank boards and pushed the head of GM out of his job. Former Treasury chief Paulson even forced the Merrill Lynch deal on Bank of America (BAC).
Chrysler had few options as it ran out of money, and the Fiat arrangement may have been the only practical one left to the No.3 US car company. According to The Wall Street Journal, in its review of communications filled in bankruptcy court, it found one reference an official at the Treasury Department referred to as "God."
The Chrysler deal is done now, water under the bridge. The government's heavy hand in business probably is not. Just last week the head of the FDIC suggested a restructuring of Citigroup (C) that would have pushed out CEO Vikram Pandit. The agency did not appear to care that the financial firm is gathering a new "blue chip" board to run the bank and make decisions about the fate of management.
It is impossible to say when or if the use of the government's "god-like" power will end. At some point, the companies that have been pushed around may take some of the issues to court. Does a board run a company or does the US government? Leave it to a judge to decide.
Douglas A. McIntyre is an editor at 24/7 Wall St.